National Minimum Wage
National Minimum Wage
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Almost all UK workers have a legal right to a minimum level of pay, called the National Minimum Wage. The level is set by the government each year based on the recommendations of the independent Low Pay Commission (LPC).
What is the National Minimum Wage?
With a few exceptions, all workers in the UK aged 16 or over are legally entitled to be paid a minimum amount per hour. This is regardless of the kind of work they do or the size and type of company. The rate is reviewed every year, and any increases take place in October.
How much is the National Minimum Wage?
There are different levels of National Minimum Wage, depending on the age of the worker:
- Adults aged 25 and over receive £8.21 an hour (this is known as the National Living Wage)
- Adults aged 21-24 receive £7.70 an hour
- A 'development rate' of £6.15 an hour is paid to:
- Workers aged 18 to 20 inclusive
- Adult workers for the first six months with a new employer if they receive accredited training (this includes further education and vocational training courses
- Young people 16 - 17 (under 18) other than apprentices (see below) receive £4.35 an hour
Your average hourly pay must be at least the National Minimum Wage. To work this out you first add up everything you've earned over a period (called the 'reference period' - normally a week), including any bonuses and commission. You then deduct any payments that do not count towards the National Minimum Wage and divide the balance by the number of hours you worked in that period to get your average pay. More details on calculating your pay can be found in the Gov.uk website.
Employers who pay workers on a piece-rate basis either have to pay their workers the minimum wage for each hour worked or have to set a fair rate which allows their workers to earn the minimum wage. (Piecework, (sometimes called 'output work'), is work where you're paid for making or processing a number of items, or for completing a number of tasks. It is often done from home.) See the Gov.uk website for more details.
Special rules for apprentices
Some apprentices qualify for the National Minimum Wage at a different rate. There are two types of apprentice:
- those working under a 'contract of apprenticeship', which is primarily on-the-job training; and
- those working under an 'apprenticeship agreement', which is a contract for services and is primarily a job rather than training.
Both types of apprentice who are under 19 or in the first year of their apprenticeship are entitled to £3.90 an hour.
Apprentices aged 19 or over who have completed their first year receive the National Minimum Wage according to their age.
Who can get the National Minimum Wage?
Almost everyone who works in the UK is legally entitled to be paid the National Minimum Wage. This is the case even if an employer asks a worker to sign an employment contract at a lower rate of pay. It isn't necessary to be in full-time employment, or to work at an employer's premises. For example, you're entitled to receive the minimum wage if you're:
- Employed by an agency
- A home worker
- A part-time worker
- A casual worker
- A pieceworker
- A worker on a short-term contract
Your right to the National Minimum Wage depends on your employment status. In order to qualify, you need to be a 'worker'.
For more information, see our 'Employees, workers and the self-employed' section.
You are not entitled to receive the National Minimum Wage if you're:
- A worker under school leaving age (you're under school leaving age in England until the end of the summer term of the school year in which you turn 16; in Scotland it's the last date in May or the first day of the Christmas holidays / 21 December depending on when your 16th birthday is and in Northern Ireland it is 30 June, if you turn 16 on or before 1 July in that year)
- Self-employed
- An apprentice (in some cases)
- An au pair
- In the armed services
- A voluntary worker or doing work experience
In Wales, Scotland and Northern Ireland, agricultural workers have separate pay rates set by each country's Agricultural Wages Board.
What payments do not count towards the National Minimum Wage?
- If your employer pays for or subsidises meals, uniforms, private health care, motoring costs or other 'benefits in kind', these don't count towards the calculation of the National Minimum Wage, even if they're taxed as income
- Tips, gratuities or service charges paid (even if paid through the payroll)
- Loans from your employer
- Expenses paid to you by your employer for travelling to a temporary workplace, which is treated by your employer as deductions from earnings under section 338 of the Income Tax (Earnings and Pensions) Act 2003. i.e. if your employer operates a scheme where you sacrifice a proportion of your salary that is replaced with a 'tax free' expenses payment for travelling to a temporary workplace.
- Pension payments
- Payment for working overtime
- Retirement lump sums
- Redundancy payments
Accommodation costs
If an employer provides accommodation, some of this (currently £7.55 a day) can be counted towards a worker's minimum pay.
What to do if you're not being paid enough
The National Minimum Wage is a specific hourly rate that includes your basic pay, plus extra money such as incentives and bonuses. If you get a regional allowance (like London Weighting) rolled on top of your basic pay, that doesn't count. Neither does extra money for shift working or overtime.
All employees have the right to be given a document setting out how their pay is calculated. If you think you're not getting what you are entitled to, try talking to your employer, who may have made a simple mistake. If this doesn't help, or if you don't want to speak to your employer, you can contact Acas or (for Northern Ireland) The Labour Relations Agency for help.
Not paying you the National Minimum Wage, if you are entitled to it, can also count as an unlawful deduction from wages.
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