Current UK Minimum Wage Rates (April 2025)
The National Minimum Wage (NMW) and National Living Wage (NLW) rates are reviewed annually each April by the Low Pay Commission.
| Age Group | Hourly Rate (2025/26) |
|---|---|
| 21 and over (National Living Wage) | £12.21 |
| 18 to 20 | £10.00 |
| Under 18 (above school leaving age) | £7.55 |
| Apprentice rate | £7.55 |
The apprentice rate applies to apprentices aged under 19, or those aged 19+ in the first year of their apprenticeship.
Who is Entitled to the Minimum Wage?
Almost all workers in the UK are entitled to the NMW, including:
- Full-time, part-time, and casual workers
- Agency workers
- Zero-hours contract workers
- Home workers and piece workers
- Trainees on work experience (if they count as workers)
Exceptions
The following are not entitled to NMW:
- Self-employed people running their own business
- Company directors (unless they have a contract of employment)
- Volunteers and voluntary workers for charities
- Members of the armed forces
- Family members living and working in the family home
- Students on work placements of up to one year as part of a UK higher education course
Calculating Compliance
Employers must consider the total pay in the pay reference period divided by the total hours worked. Several factors affect this calculation:
What Counts as Pay
- Basic salary or wages
- Incentive payments and bonuses paid in the pay period
- Piece-rate payments
What Does NOT Count
- Overtime premiums (the premium element above the basic rate)
- Tips, gratuities, and service charges
- Expenses and travel allowances
- Benefits in kind (company car, private medical insurance)
- Pension contributions
- Redundancy payments
- Loans or advances of wages
Salary Sacrifice Schemes
Salary sacrifice arrangements (such as cycle to work, childcare vouchers, or pension contributions above the minimum) reduce the cash element of pay. Employers must ensure the reduced cash pay still meets NMW requirements for every hour worked.
Accommodation Offset
If an employer provides accommodation, they can count a daily amount toward NMW compliance. The accommodation offset rate for 2025/26 is £10.66 per day (£74.62 per week). Any accommodation charge above this offset must be deducted from the worker's pay for NMW purposes.
Enforcement and Penalties
HMRC enforces National Minimum Wage compliance through:
- Investigations triggered by worker complaints or targeted campaigns
- Arrears payments: Employers must pay back all underpayments to affected workers
- Financial penalty: Up to 200% of the total arrears, capped at £20,000 per worker
- Naming and shaming: Employers who owe more than £500 in arrears are publicly named by the Department for Business and Trade
- Criminal prosecution: In the most serious cases, employers can face criminal charges for wilful refusal to pay the NMW
Common Compliance Mistakes
- Not paying for travel time between assignments (this is working time)
- Deductions for uniforms or tools that take pay below NMW
- Not accounting for time spent on training required by the employer
- Assuming salaried workers are automatically compliant without checking hours
- Overlooking the apprentice rate change when an apprentice turns 19 or completes their first year
Key Dates
- 1 April 2025: Current NMW/NLW rates took effect
- Autumn 2025: Low Pay Commission submits recommendations for April 2026 rates
- 1 April 2026: New rates will take effect
How Grove HR Helps
Grove HR flags employees whose effective hourly rate is at risk of falling below the NMW, tracks age-based rate changes automatically, and alerts managers when apprentices reach the threshold for a rate increase.
Frequently Asked Questions
What is the difference between the National Minimum Wage and the National Living Wage?
The National Living Wage (NLW) is the highest band of the National Minimum Wage, applying to workers aged 21 and over. It was introduced in April 2016 as a premium rate for older workers. The NMW covers workers under 21 and apprentices at lower rates. Both are legally enforceable.
Do tips count towards the minimum wage?
No. Since the Employment (Allocation of Tips) Act 2023 came into force, tips, gratuities, and service charges must be passed to workers in full and cannot be used to make up minimum wage pay. Tips are additional to the NMW.
Can I pay an intern less than the minimum wage?
It depends on the intern's worker status. If the intern is classed as a worker (doing productive work, set hours, obligations to attend), they are entitled to at least NMW. Genuine voluntary placements and student work experience placements under one year as part of a UK higher education course may be exempt.