From April 2026, changes to the UK National Minimum Wage and National Living Wage will take effect, bringing higher statutory pay floors and renewed enforcement focus.
For employers, HR professionals and payroll teams, the changes will necessitate careful review of pay structures, working time calculations and payroll processes to avoid inadvertent underpayment.
This guide sets out what is changing, who is affected and where risks commonly arise in practice.
New National Minimum Wage rates from 1 April 2026
The government has confirmed the National Minimum Wage increases recommended by the Low Pay Commission. The new rates apply from 1 April 2026 and should be paid from the first pay reference period starting on or after that date.
From 1 April 2026, the National Living Wage for workers aged 21 and over increases to £12.71 per hour. The 18 to 20 rate increases to £10.85 per hour. The 16 to 17 rate increases to £8.00 per hour and the apprentice rate also increases to £8.00 per hour. The daily accommodation offset increases to £11.10 per day.
These rates sit alongside the usual compliance traps around working time and deductions, so the operational work remains as important as the headline uplift.
Employers need to ensure the correct rate is applied based on the worker’s age and status at the point the pay reference period begins. Rate changes do not apply retrospectively, but they do apply immediately from the first pay period starting on or after 1 April 2026.
Where payroll systems are not updated in time, underpayments can arise quickly, particularly for monthly-paid staff.
| Worker category | Hourly rate from 1 April 2026 | Increase |
|---|---|---|
| National Living Wage (21 and over) | £12.71 | 50p (4.1%) |
| 18 to 20 year old rate | £10.85 | 85p (8.5%) |
| 16 to 17 year old rate | £8.00 | 45p (6.0%) |
| Apprentice rate | £8.00 | 45p (6.0%) |
| Accommodation offset (daily cap) | £11.10 | 44p (4.1%) |
The minimum wage applies to workers as well as employees. This distinction often catches businesses out. Casual staff, zero-hours workers, part-time staff and some interns may all fall within scope.
Apprentices are subject to a separate minimum rate, but only where they meet the statutory definition. Apprentices aged 19 or over who have completed the first year of their apprenticeship move onto the age-appropriate minimum wage, not the apprentice rate.
Salary sacrifice arrangements, including for pensions or benefits, can reduce cash pay for minimum wage purposes and may result in non-compliance if not reviewed carefully.
Working time and pay calculations
Minimum wage compliance is assessed by reference to average hourly pay over the relevant pay reference period, not headline salary alone. This is where many breaches occur.
Common problem areas include unpaid training time, mandatory meetings outside scheduled hours, travel time between assignments and deductions for uniforms or equipment. If time counts as working time for minimum wage purposes, it must be paid at least at the statutory rate.
Payroll teams should be alert to changes in working patterns, overtime arrangements and hybrid roles that blur the line between paid and unpaid time.
Deductions that can trigger underpayment
Some deductions reduce pay for minimum wage purposes even if they are lawful in other contexts. These include deductions for uniforms, tools, meals provided by the employer and some accommodation charges above the permitted offset.
From April 2026, higher hourly rates increase the likelihood that deductions push effective pay below the legal minimum if arrangements are not reviewed.
Accommodation offsets remain a frequent source of error, particularly in hospitality, care and seasonal work.
Enforcement and penalties
HMRC enforces minimum wage compliance and has powers to carry out inspections, require records and issue notices of underpayment. Penalties can include repayment of arrears to affected workers and financial penalties calculated as a multiple of the underpayment.
Public naming remains part of the enforcement approach, which carries reputational risk as well as financial cost.
Increases in statutory rates often coincide with increased enforcement activity, particularly in sectors with historically higher non-compliance.
Statutory family-related pay rates from 5 April 2026
Statutory family-related pay rates increase from 5 April 2026. These rates apply regardless of what an employment contract says, unless the contract provides more generous terms.
| Type of payment | 2026–27 weekly rate | Operational point |
|---|---|---|
| Statutory Maternity Pay (first 6 weeks) | 90% of average weekly earnings | Earnings-related phase, not capped |
| SMP (remaining weeks) | £194.32 or 90% of AWE if lower | Rate uplift applies from April pay periods |
| Statutory Paternity Pay | £194.32 or 90% of AWE if lower | Common errors where pay spans April |
| Statutory Adoption Pay (first 6 weeks) | 90% of average weekly earnings | Same structure as SMP |
| SAP, ShPP, SPBP, SNCP (standard rate) | £194.32 or 90% of AWE if lower | Ensure payroll templates are updated |
Employers can usually recover 92% of statutory family pay from HMRC, or 109% if total Class 1 National Insurance for the previous tax year is £45,000 or less.
Statutory Sick Pay from April 2026
The Statutory Sick Pay rate for the 2026 to 2027 tax year is £123.25 per week or 80% of the employee’s average weekly earnings, whichever is lower.
SSP is payable from the first day of sickness absence. The daily rate depends on the employee’s working pattern and qualifying days, and can be based on the standard rate or calculated specifically for the employee.
Flat-rate assumptions create risk where earnings fluctuate, so payroll teams should use the SSP calculator or apply the manual calculation method correctly.
What this means for HR and payroll planning
April 2026 brings a cluster of statutory changes rather than a single rate increase. Minimum wage uplifts, Statutory Sick Pay reform and higher statutory family pay combine to raise baseline employment costs and increase the scope for error.
Rising statutory pay rates can have knock-on effects for minimum wage compliance. For example, deductions made during periods of sickness or family leave, or errors in SSP or statutory pay calculations, can pull average hourly pay below the minimum wage threshold.
These interactions are often overlooked, particularly where different teams manage payroll, HR policy and absence administration.
Employers that review these changes in isolation are more likely to miss how they interact. A joined-up review of pay rates, deductions, absence processes and payroll settings is the safer approach.
Leaving updates until after April increases the risk of arrears, corrective payroll runs and employee complaints.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing & Content Agency for the Professional Services Sector.
