National Minimum Wage and National Living Wage - rates and overview
The minimum wage a worker should get depends on their age and if they are an apprentice.
The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage - workers get it if they're over 25 years of age.
It doesn't matter how small an employer is, they still have to pay the correct minimum wage.
This guide gives you an overview of the minimum wage - it provides a summary of the key elements and explains your main responsibilities as an employer.
National Minimum Wage and National Living Wage rates
The National Minimum Wage and the National Living Wage in the UK apply to workers in Northern Ireland. These minimum wage rates are the hourly rate that workers should be paid by their employers depending on their age or whether they are an apprentice.
National Minimum Wage and National Living Wage rates change every April. The current minimum wage rates are in effect from 1 April 2020 to 31 March 2021.
Minimum wage rates
The minimum wage rates for 2020-21 are:
|Age||Minimum Wage Rates from April 2020|
|25 years old and over||£8.72|
|21-24 years old||£8.20|
|18-20 years old||£6.45|
|16-17 years old||£4.55|
*Apprentices under the age of 19 years old or aged 19 years old or over and in the first year of their apprenticeship are entitled to a minimum hourly rate of £4.15 per hour (this rate does not apply to Higher Level Apprenticeships).
Apprentices are entitled to the minimum wage for their age if they are aged 19 years or over and have completed the first year of their apprenticeship.
For past minimum wage rates see National Minimum Wage: previous rates.
Who is entitled to be paid the minimum wage rate?
As an employer you have a legal obligation to pay your workers the correct minimum wage rate at the very least. Ensure you understand who must be paid the minimum wage. Some people like the self-employed are not entitled to the minimum wage. For more guidance see self-employed and the minimum wage and National Minimum Wage and National Living Wage - who is not entitled to it.
Employer requirements for the minimum wage
If a worker is entitled to the National Minimum Wage or National Living Wage, you must pay them at least the rate they are entitled to for the hours of work that qualify. You cannot make an agreement with a worker to pay them less than the minimum wage rate.
Which minimum wage rate applies to a worker?
You need to know which minimum wage rate applies to a worker - based on their entitlement at the start of each pay reference period. The minimum wage rate that applies to a worker is the rate they are entitled to on the first day of the pay reference period. For more information about pay reference periods see National Minimum Wage and Living Wage pay reference period.
Minimum wage rate example
For example, at age 20 a worker is entitled to the 18 to 20 years old minimum wage rate. From the first pay reference period starting on or after their 21st birthday, they become entitled to the 21 to 24 years old minimum wage rate. If you pay them for a pay reference period ending on a Friday and their birthday is on the following Wednesday - they will be entitled to the 21 to 24 years old minimum wage rate from the Saturday after their birthday.
As the minimum wage rates are age related, you may need to ask workers to provide proof of their age.
Minimum wage rates for agricultural workers
Minimum wage rates for agricultural workers in Northern Ireland are different from the National Minimum Wage and National Living Wage rates. These minimum wage rates for agricultural workers are set by the Agricultural Wages Board (AWB) for Northern Ireland. The Department of Agriculture, Environment and Rural Affairs (DAERA) provides further information on the agricultural rates of pay, orders and reports.
The minimum wage rates for agricultural workers in 2020-21 that took effect from 1 April 2020 are:
|Agricultural worker grade||Current rates for 2020-21|
|Grade 1 (minimum rate)||£6.88|
|Grade 2 (standard worker)||£7.42|
|Grade 3 (lead worker)||£8.82|
|Grade 4 (craft grade)||£9.49|
|Grade 5 (supervisory grade)||£9.99|
|Grade 6 (farm management grade)||£10.84|
Where at any time the National Minimum Wage becomes higher than the hourly rate set out above, the minimum rate will become equal with the National Minimum Wage.
National Living Wage
The National Living Wage is £8.21 an hour for workers aged 25 and older
The National Living Wage is for workers aged 25 years old and above. It is currently set at £8.21 per hour.
The National Minimum Wage still applies for workers aged 21 to 24 years old.
Who should be paid the minimum wage?
Most people above compulsory school age working legally in the UK are entitled to be paid the National Minimum Wage. They must be 25 or over to get the National Living Wage.
Contracts for payments below the minimum wage are not legally binding. The worker is still entitled to the National Minimum Wage or National Living Wage.
Types of worker entitled to minimum wage
Workers are also entitled to the correct minimum wage if they are:
- part-time workers
- casual labourers
- agency workers
- workers and homeworkers paid by the number of items they make
- trainees, workers on probation
- disabled workers
- agricultural workers
- foreign workers
- offshore workers
Workers are entitled to the minimum wage whether or not they have a written employment contract.
For more information see National Minimum Wage and National Living Wage - who must be paid it.
Examples of people not entitled to minimum wage
Some people who work in the UK are not entitled to the National Minimum Wage or the National Living Wage.
- genuinely self-employed people
- company directors
- volunteers or voluntary workers
- workers on a government employment programme
- family members of the employer living in the employer's home
- non-family members living in the employer's home who share in the work and leisure activities, are treated as one of the family and aren't charged for meals or accommodation eg au pairs
- workers younger than school leaving age (usually 16)
- higher and further education students on a work placement up to one year
- workers on some government schemes or European Union programmes
- members of the armed forces
- share fishermen
- people living and working in a religious community
For more information see National Minimum Wage and National Living Wage - who is not entitled to it.
What is included in minimum wage pay?
What counts as pay for National Minimum Wage and National Living Wage purposes varies depending on several factors - including, for example, overtime, any premium pay rates, deductions you make from payroll or payments the worker must make to you to do their job.
Benefits in kind such as meals, fuel, a car or employer pension contributions do not count towards minimum wage pay. If you provide living accommodation a set amount may count towards minimum wage pay.
You must make sure you pay your workers who are entitled at least minimum wage pay. To see whether a worker's pay is in line with the minimum wage, you must calculate it in a particular way.
Only particular elements of a worker's pay can count towards their minimum wage pay. For example loans, pension payments, redundancy payments and the premium element of overtime pay do not count towards minimum wage pay. Also, some deductions and payments from workers will reduce minimum wage pay. For more information, see National Minimum Wage and National Living Wage - calculating minimum wage pay.
Calculating minimum wage pay
A worker's pay for minimum wage purposes must be calculated in a particular way. The starting point is the worker's total pay in a pay reference period before income tax and National Insurance contributions are deducted. Then you need to work out which elements of pay count towards minimum wage and those elements that do not count for minimum wage purposes.
What counts as pay for minimum wage purposes?
Elements that do count towards minimum wage are:
- incentive pay
For further details see what counts as minimum wage pay.
What does not count as pay for minimum wage purposes?
Elements that do not count towards minimum wage are:
- advances of wages
- pension payments
- lump sums on retirement
- redundancy payments
- rewards under staff suggestion schemes
- tips, gratuities, service and cover charges
- overtime and shift premia
- different pay rates for different jobs
- payments by an employer to reimburse a worker's expense
- benefits in kind eg fuel, meals, car, medical insurance, child care vouchers
For those elements that do not count towards the minimum wage you must either not include them at all, such as loans or different pay rates for different jobs, or deduct specific premium amounts eg when paying a higher rate than the standard rate for some work such as overtime.
For further details see pay that does not count towards the minimum wage - overtime and shift rates.
Including payments that do not count as pay for the minimum wage can wrongly appear that you have paid the minimum wage when in fact you have not.
For full details see calculating the minimum wage - GOV.UK guidance.
Minimum wage calculator
You should use the minimum wage calculator for employers to check if you are paying the correct minimum wage or if you owe a payment from the previous year. Employers who discover they've paid a worker below the correct minimum wage must pay any arrears immediately.
If you are unsure about any aspect of minimum wage entitlement you can contact the Acas helpline on 0300 123 1100.
National Minimum Wage and National Living Wage records and reporting
You are legally required to keep sufficient records to show you are complying with the minimum wage requirements. If you do not - it is a criminal offence and you could be fined. For many employers, existing payroll and business records will be sufficient to demonstrate they are paying their workers the minimum wage and there is no need to maintain separate records specifically for minimum wage purposes. You must decide what counts as sufficient records for your business.
You must produce records for inspection if requested by your workers or an HM Revenue & Customs Compliance Officer.
Your records will be used in the event of a dispute. In civil claims the burden is on you - the employer - to prove you have paid your workers at least the minimum wage.
For information on record keeping, see National Minimum Wage and National Living Wage - record keeping.
Minimum wage enforcement and penalties
The National Minimum Wage and National Living Wage can be enforced in a number of different ways, including:
- by Compliance Officers of HM Revenue & Customs (HMRC)
- by a worker making a claim in an industrial tribunal or court
- in the case of agricultural workers, through Agricultural Wages Inspectors (who can also enforce the agricultural minimum wage)
There are six criminal offences relating to the minimum wage and you could face an unlimited fine for committing the more serious offences.
HMRC Compliance Officers may carry out inspections of employers at any time. There is no requirement on them to provide reasons for an inspection. Officers will act in response to complaints that an employer is not paying the minimum wage, whether the complaint is by workers or others. They will also investigate where they consider there is a risk of non-payment.
You must pay minimum wage to workers if it is due. If you discover you have paid your workers below minimum wage rates, you must pay any arrears of minimum wage to the workers immediately. Arrears are calculated in accordance with a formula that uses current rates. HMRC Compliance Officers will issue a notice of underpayment to enforce any arrears of minimum wage they find are outstanding at the start of their investigation. They may also impose a penalty.
If you break minimum wage law, you can now also be named publicly.
For more information see National Minimum Wage and National Living Wage - enforcement.
National Minimum Wage and National Living Wage - Acas Helpline
You can get advice and guidance on the National Minimum Wage and National Living Wage by contacting the Acas Helpline. You can also make a complaint if you believe a worker is being paid under the minimum wage rate they are entitled to.
The Acas Helpline Tel 0300 123 1100 is open Monday - Friday, 08:00-18:00.
Alternatively, Acas operate an online helpline.
Minimum wage complaints
If workers believe they aren't being paid the minimum wage they can telephone the Acas Helpline or complete the online complaint form. All complaints are treated as confidential and HM Revenue & Customs will investigate where it appears that a worker or former worker may have been underpaid.
Workers who believe they have not been paid the minimum wage when it is due may also make a claim through an industrial tribunal or civil court.
In Northern Ireland, the Acas Helpline can advise callers only on matters of minimum wage and Gangmasters licencing standards.
Queries on other areas of employment rights should be directed to the Labour Relations Agency (LRA) Helpline on Tel 03300 555 300. The LRA Helpline is open Monday - Friday, 09:00-17:00. Contact the LRA Helpline.
The National Minimum Wage and National Living Wage: five things you should know
As an employer, you are responsible for ensuring you pay the National Minimum Wage and National Living Wage. The following top tips will help you to understand your main responsibilities.
- Know who should be paid the minimum wage: Most people above compulsory school age working legally in the UK are entitled to be paid at least the minimum wage. Workers are entitled to the minimum wage whether or not they have a written employment contract. See who should be paid the minimum wage?
- Understand what should be included in minimum wage pay: What should be counted as minimum wage pay varies depending on several factors. For example, benefits in kind such as meals or fuel do not count towards it. See what is included in minimum wage pay?
- Keep sufficient minimum wage records: You are legally required to keep sufficient records to show you're meeting minimum wage requirements. For many employers existing payroll and business records are appropriate. These records can be used if a dispute occurs - it is your responsibility to prove you are meeting requirements. See National Minimum Wage and National Living Wage - record keeping.
- Be aware of what is classed as a criminal offence: Criminal offences relating to the minimum wage include refusal or wilful neglect to pay it and producing false records or information. See National Minimum Wage and Living Wage - criminal offences.
- Keep up-to-date with minimum wage rates: Changes to the National Minimum Wage and National Living Wage rates take place in April each year. It is your responsibility as an employer to ensure you are paying the correct rate. See current National Minimum Wage and National Living Wage rates.
National Minimum Wage: previous rates
Listed below are the minimum wage rates for UK workers for previous years from 1999 up to the current rate. This also includes the National Living Wage rates that were first introduced in April 2016.
Main Rate (Age 22+)
Youth Development Rate (Age 18-21)
Age 16-17 Rate
|1 Apr 1999|| |
|1 Jun 2000|| |
|1 Oct 2000|| |
|1 Oct 2001|| |
|1 Oct 2002|| |
|1 Oct 2003|| |
|1 Oct 2004|| |
|1 Oct 2005|| |
|1 Oct 2006|| |
|1 Oct 2007|| |
|1 Oct 2008|| |
|1 Oct 2009|| |
|Main Rate changed to Age 21+ from October 2010||Youth Development Rate changed to Age 18-20 from October 2010||Age 16-17 Rate remained the same in October 2010||Apprentice Rate was introduced in October 2010|
|1 Oct 2010||£5.93||£4.92||£3.64||£2.50|
|1 Oct 2011||£6.08||£4.98||£3.68||£2.60|
|1 Oct 2012||£6.19||£4.98||£3.68||£2.65|
|1 Oct 2013||£6.31||£5.03||£3.72||£2.68|
|1 Oct 2014||£6.50||£5.13||£3.79||£2.73|
|1 Oct 2015||£6.70||£5.30||£3.87||£3.30|
Previous rates for the National Living Wage and the National Minimum Wage
The National Living Wage was introduced in the UK in April 2016 and is an obligatory minimum wage rate that employers must pay to workers aged 25 and over.
|Year||25 and over||21 to 24||18 to 20||Under 18||Apprentice|
|1 Apr 2016||£7.20||£6.70||£5.30||£3.87||£3.30|
|1 Oct 2016||£7.20||£6.95||£5.55||£4.00||£3.40|
|1 Apr 2017||£7.50||£7.05||£5.60||£4.05||£3.50|
|1 Apr 2018||£7.83||£7.38||£5.90||£4.20||£3.70|
|1 APR 2019||£8.21||£7.70||£6.15||£4.35||£3.90|
See the current National Minimum Wage and National Living Wage rates.