National Minimum Wage vs National Living Wage

The National Minimum Wage is for people aged 22 and under, with different rates depending on their specific age.

The National Living Wage is for people aged 23 or over, and is one set rate for everyone in that age bracket.

Apprentices also have their own minimum wage rate

Rates are reviewed and updated yearly, normally in April, and any changes must be put into effect within a certain time period. Learn when wage rises need to be actioned.

Current Minimum and National Living Wage rates

Age 23 or over (National Living Wage)	£10.42 per hour
Age 21 to 22	£10.18 per hour
Age 18 to 20	£7.49 per hour
Under 18	£5.28 per hour
Apprentices*	£5.28 per hour

 

*Apprentices are entitled to the minimum wage for their age if they are aged 19 or over and have completed the first year of their apprenticeship.

Example: An apprentice aged 21 who has completed the first year of their apprenticeship is entitled to a minimum hourly rate of £10.18.

How to calculate the minimum wage

Government guidance on what counts and does not count as pay and working hours for minimum wage purposes, and how to calculate the minimum wage.

What about the Real Living Wage?

The Real Living Wage is different from the Minimum and National Living Wages, and is an independently-calculated hourly rate of pay based on the actual cost of living.

Set by the Living Wage Foundation, the Real Living Wage rage is currently £10.90 per hour across the UK for all workers aged 18 or over.

It also includes a London weighting, reflecting the higher cost of living in the capital, set at £11.95 per hour.

See how the Real Living Wage is calculated >

Read about the benefits – to businesses, as well as workers - of paying the Real Living Wage.

The Real Living Wage is not compulsory in law, but is currently voluntarily paid by more than 10,000 UK businesses.

Buckinghamshire Business First is proud to be a Living Wage Employer, accredited by the Living Wage Foundation, meaning every member of our staff earns a Real Living Wage. Learn how your business can become a Living Wage Employer.

What are employers' legal duties?

It is against the law to pay below the National Minimum Wage or National Living Wage or to falsify pay records.

If an employer owes a worker any arrears, they must pay these back. If an employer does not pay the arrears, HMRC will send them a notice for the arrears, plus a fine for not paying the minimum wage.

HMRC can then take them to court on behalf of the worker if the employer still refuses to pay. Employers can be fined up to £20,000 per worker if they are taken to court by HMRC and found to have underpaid workers. Employers also face being publicly named and banned from being a company director for up to 15 years.

Employers can also be taken to an employment tribunal or civil court if an employee or worker feels they have:

• been dismissed or experienced unfair treatment because of their right to the National Minimum Wage or National Living Wage
• been discriminated against because their age means they are entitled to a higher minimum wage rate

Individuals can anonymously report concerns to HMRC about themselves or somebody else not being paid the minimum wage.

Advice and resources for employers

Acas provides free and confidential advice to employers, employees and their representatives on employment rights and policies, including pay and wage requirements. See their information on the minimum wage here.

The ACAS helpline – 0300 123 1100 - is available Monday to Friday, 8am to 6pm, and has a free translation service for over 100 languages.

You can ask Acas about issues including:

• pay and the National Minimum Wage
• employment rights and responsibilities
• contracts and terms and conditions
• working time, rest breaks and holiday entitlement
• equality in the workplace
• agricultural workers’ rights

Check you’re not making unintentional mistakes

Sometimes, you may think you are paying your staff the minimum wage, but there are ways that you may unintentionally be paying under the minimum wage. Read this handy guide to some of the common mistakes employers can make.

Find more support on HR issues

Visit our HR and Recruitment business support pages for more advice and resources.