NLW / NMW Payroll Impact Calculator
2026/27 Minimum Wage Rates (from April 2026)
| Age Group | 2025/26 Rate | 2026/27 Rate | Increase |
|---|---|---|---|
| 21+ (NLW) | £11.44/hr | £12.21/hr | +77p (6.7%) |
| 18–20 | £8.60/hr | £10.00/hr | +£1.40 (16.3%) |
| 16–17 & Apprentice | £6.40/hr | £7.55/hr | +£1.15 (18.0%) |
Your Workforce on Minimum Wage
Understanding the April 2026 Minimum Wage Rates
The April 2026 National Living Wage of £12.21 per hour represents a 6.7% increase on the 2025/26 rate of £11.44. The government has set a target for the NLW to reach two-thirds of median earnings by 2024 and has continued to increase rates aggressively. For younger workers, the increases are even larger as part of a long-term plan to reduce the age-related differentials.
Businesses should also factor in that higher wages increase the employer NIC bill (since more earnings fall above the £5,000 Secondary Threshold), and that wages directly affect pension auto-enrolment contributions.
Frequently Asked Questions
What is the National Living Wage from April 2026?
The National Living Wage (NLW) from April 2026 is £12.21 per hour for workers aged 21 and over. The National Minimum Wage rates from April 2026 are: 18-20 year olds = £10.00/hr; 16-17 year olds = £7.55/hr; Apprentices (first year or under 19) = £7.55/hr. These rates were announced in the October 2024 Autumn Budget.
How much did the minimum wage increase in April 2026?
From April 2025 to April 2026, the NLW for 21+ rose from £11.44 to £12.21 — an increase of 77p per hour (6.7%). The 18-20 rate rose from £8.60 to £10.00 (up £1.40 or 16.3%). The 16-17 and apprentice rate rose from £6.40 to £7.55 (up £1.15 or 18%). The large increases for younger workers reflect the government's aim to eventually equalise rates across age groups.
What is the difference between the National Living Wage and the National Minimum Wage?
The National Living Wage (NLW) is the legally mandated minimum hourly rate for workers aged 21 and over — it is £12.21/hr from April 2026. The National Minimum Wage (NMW) applies to younger workers: £10.00/hr for 18-20 year olds, and £7.55/hr for 16-17 year olds and first-year apprentices. Both are legal minimums — paying below them is a criminal offence. Note: the 'Real Living Wage' from the Living Wage Foundation is a voluntary, higher rate and is not a legal requirement.
Does minimum wage include tips?
No. Tips, gratuities and service charges do not count toward National Living Wage or National Minimum Wage calculations. Under the Employment (Allocation of Tips) Act 2023, which came into force in October 2024, employers must pass all tips to workers fairly and transparently, but the base hourly pay must still meet the NLW/NMW floor before tips are added.
What if a business cannot afford to pay minimum wage?
There is no exemption from minimum wage obligations for businesses that cannot afford to pay. Paying below the NLW or NMW is a criminal offence and HMRC actively enforces compliance, naming and shaming non-compliant employers. Businesses struggling with higher wage costs should consider: applying for business support, reviewing pricing structures, using the Employment Allowance to offset NIC costs, or seeking advice from ACAS or a qualified accountant.