Every April, the National Minimum Wage rates go up. It happens every year, but the increase still catches some employers out — not because they are not paying attention, but because the detail is easy to get wrong when you are busy running a business.
This year, the new rates take effect on 1 April 2026. Here is what you need to know and what you should check before that date arrives.
The new rates from 1 April 2026
The updated National Minimum Wage and National Living Wage rates from 1 April 2026 are:
- National Living Wage (21 and over): £12.21 per hour
- 18 to 20 year old rate: £10.00 per hour
- 16 to 17 year old rate: £7.55 per hour
- Apprentice rate: £7.55 per hour
The National Living Wage applies to workers aged 21 and over. Make sure you are applying the right rate to the right age group — a simple age check on your workforce before 1 April is worth doing.
Why this matters beyond just updating hourly rates
For many employers, the update feels routine. You change the rate in your payroll software and move on. But there are a few situations where it is more complicated than that.
The most common issue we see is salary sacrifice arrangements that inadvertently push workers below the minimum wage. If an employee is making pension contributions through salary sacrifice, their notional pay — the figure used to assess minimum wage compliance — can end up below the legal minimum even if their headline salary looks fine.
The same applies to any deductions or arrangements that reduce take-home pay: uniform costs, accommodation, or other benefits that count against minimum wage calculations. When the minimum wage rises, arrangements that were previously compliant can tip into non-compliance without anything else changing.
Other common mistakes employers make
- Not updating salaried workers: Salaried employees near the minimum wage threshold need checking too, not just hourly workers.
- Forgetting younger workers: The age bands are easy to misapply, especially if you have a mix of staff in their late teens and early twenties.
- Missing the effective date: The new rates apply from 1 April, not from the start of your next pay period. If your pay period straddles the 1st, you may need to apply a blended rate or make sure the increase is reflected correctly.
- Not reviewing apprentice pay: Apprentices have their own rate, but once they are 19 or older and past their first year, they move onto the standard age-appropriate rate.
A practical checklist before 1 April
Work through these before the new rates kick in:
- Pull a list of all employees paid at or near the current minimum wage rates
- Check ages and confirm the correct rate applies to each worker
- Review any salary sacrifice arrangements and recalculate notional pay at the new rates
- Check that your payroll software is updated with the new rates — most systems update automatically but it is worth confirming
- Update employment contracts where pay is stated as a fixed amount below the new minimum
- Brief your line managers so they are aware of the changes and can answer employee questions
- Check any apprentices have the correct rate applied based on their age and year of training
What happens if you get it wrong?
HMRC takes minimum wage non-compliance seriously. Employers who underpay can face penalties of up to 200% of the underpayment, public naming, and back-payment of arrears to affected workers. Most cases are not deliberate — they tend to come from oversight or outdated systems — but that does not reduce the consequences.
The good news is that this is entirely preventable with a bit of preparation. If you are not sure whether your payroll is fully compliant ahead of the April changes, now is the time to check.
Need help reviewing your payroll ahead of April?
Lucas White Payroll Services works with businesses across the UK to keep payroll compliant and accurate. If you want a hand checking your setup before the new rates come into force, get in touch — we are happy to have a look.
