By law, you are legally required to pay at least the national minimum wage to your employees. The government will be updating these rates in April 2026, so it’s important to make sure your payroll is fully aligned with the latest minimum wage policy and that none of your team are being paid below the legal threshold.
Here are the minimum wage rates coming into effect in April 2026:
| Age / Category | Minimum Wage Rate (from 1 April 2026) |
| Apprentice |
£8.00 per hour |
| Under 18 years old |
£8.00 per hour |
| 18-20 years old |
£10.85 per hour |
| 21 and over (National Living Wage) |
£12.71 per hour |
Why the Minimum Wage Matters
Did you know that HMRC recently published a list of over 500 UK businesses that had been found guilty of not abiding by the national minimum wage regulations? These range from large PLCs to very small employers. Breaking the minimum wage policy can lead to not only fines and backdated pay and tax bills, but also serious damage to relationships with employees and potential employees.
How to Avoid Breaching the Minimum Wage Policy
Here are four key things you should always check, to make sure none of your staff are being paid below the legal minimum:
1. Overtime
While there’s no legal requirement to pay for extra hours unless your contract says so, you must check that the average hourly rate, including all hours worked (overtime, unpaid, etc.), doesn’t fall below the minimum wage rate for that worker’s age. This is especially important for staff on a fixed annual salary who sometimes work unpaid overtime but may still be only just above the NMW threshold.
2. Deductions from wages
Statutory deductions like PAYE and National Insurance are fine. But be careful with other deductions (uniforms, accommodation, training, food, cycle-to-work schemes, childcare, etc.), because if you deduct too much, you could push a worker’s pay below the national minimum wage for that pay period. If in doubt, check with your accountant or HR adviser.
3. Birthdays (age brackets)
As part of your minimum wage policy, you need to make sure dates of birth are accurate in your payroll system. Why? Because when an employee turns 18, or 20, they move into a different minimum wage bracket. If your payroll software isn’t up to date, they could be underpaid.
4. Salary Sacrifice
Some employees sacrifice part of their salary in return for other perks such as payment into their pension. This saves the employee tax and saves the employer Employers’ NI.
What many employers do not realise is that it is the employee’s reduced salary that must be used when checking they’re earning more that the National Minimum Wage (not the original amount).
What to Do Next
- Review your payroll to make sure the new minimum wage rates are built in.
- Double-check any deductions to ensure compliance.
- Confirm employee’s dates of birth in your system, so pay is correct when they change brackets.
- If it’s too complex or time-consuming, you might want to outsource payroll to a specialist team, such as our 5 Four Payroll Services, to take the risk off your plate.
How 360, Chartered Accountants Can Help
Keeping on top of the minimum wage 2026 can be tricky, but you don’t have to do it alone. 360, Accountants can ensure your payroll is accurate and your minimum wage policy is compliant. Get in touch with us today.
