National Minimum Wage and Living Wage rates
There are different levels of National Minimum Wage (NMW), depending on your age and whether you are an apprentice. If you're aged 25 and over, you'll get the National Living Wage (NLW). The hourly rates change every April.
The minimum wage and living wage rates are:
|Age||Rates from April 2020|
|25 and over||£8.72|
|21 to 24||£8.20|
|18 to 20||£6.45|
*If under 19 or in first year of apprenticeship (otherwise refer to age bands). The apprenticeship rate does not apply to Higher Level Apprenticeships.
Further information on National Living and National Minimum Wage rates can be viewed at this link:
Agricultural workers in Northern Ireland are entitled to the Agricultural Minimum Wage rates, rather than the NMW or NLW, unless the NMW or NLW rate is higher.
No worker can be paid less than the NMW or NLW, but some agricultural workers must be paid more than the NMW or NLW because there is a higher Agricultural Minimum Wage rate. The rates change in April each year.
|Grade||Rates from April 2020|
|Grade 1 - minimum rate applicable for the first 40 weeks cumulative||£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|
*These are the minimum hourly rates before tax and national insurance deductions.
Where at any time the NMW becomes higher than the hourly rate set out above, then the minimum rate shall be equal to the NMW.
When overtime is to be applied after 39 hours of work, it will be applied at time and a half.
Entitlement to the National Minimum Wage (NMW)
Most workers in the UK over compulsory school leaving age are legally entitled to be paid at least the NMW and all employers have to pay it to you if you are entitled to it. It makes no difference:
- if you are paid weekly or monthly, by cheque, in cash or in another way
- if you work full time, part time or any other working pattern
- if you work at your employer’s own premises or elsewhere
- what size your employer is
- where you work in the UK
To find out if you're entitled to the National Minimum Wage, visit:
Work experience and the National Minimum Wage
Work experience can be paid or unpaid, depending on the arrangements you have with your employer. Find out if you are entitled to be paid the National Minimum Wage (NMW) when doing work experience.
Calculating the National Minimum Wage
Your average hourly pay is worked out over a period called the ‘pay reference period’. This is usually the period of time that you are actually paid for. For example, if you are paid weekly your pay reference period is one week; if you are paid monthly it is one month. A pay reference period can’t be longer than 31 days.
The pay that counts may not just be the pay you receive during the pay reference period. It also includes pay which you earn during that period, but don’t receive until the next one. For example, if you are paid monthly and do some overtime near the end of July you might not be paid for it until August. The overtime pay will still count towards your July pay.
To find out whether you are getting the NMW you need to know what elements of pay count towards the NMW. You also need to know which hours you are entitled to be paid for. This depends on which of the four types of work under the NMW rules you are:
- paid by the hour
- paid an annual salary
- paid per task or piece of work done
- paid in other ways (unmeasured work)
Pay that counts towards the NMW
The pay you receive that can be used to calculate the NMW is known as your NMW pay.
NMW pay is calculated on gross pay (before tax and National Insurance have been taken off). Your gross pay includes your basic pay for the work you have done and other types of pay which count towards the NMW. For example, sales commission, performance-related pay or other payments based on how well you do your job.
Some payments don’t count towards NMW pay. You should deduct these from your total pay before working out whether you are getting the NMW. Payments which don’t count include:
- advances of wages
- pension payments
- retirement lump sums
- redundancy payments
- rewards under staff suggestion schemes
- any premium element (in other words, anything you are paid on top of your basic pay) for working at special times, for example overtime or on bank holidays
- allowances on top of your basic pay, for example for working unsocial hours, in a particular area (for example, London Weighting), in dangerous conditions, ‘on call’, or performing special duties over and above your normal ones
- tips, gratuities, service charges and cover charges
Deductions from your pay and payments to your employer
Some deductions and payments reduce NMW pay. However, your employer cannot make any deductions from your pay, or take payments from you, unless certain conditions are met.
Deductions and payments which do not reduce NMW pay are:
- penalties for misconduct – as long as these penalties are in your employment contract
- paying back an advance of wages
- paying back an accidental overpayment of wages
- the costs of any shares or securities which you have chosen to buy in your firm
- money you choose to have deducted from your pay (for example, a pension contribution or trade union subscription), as long as the deduction isn’t required as part of your work and isn't for your employer's own use and benefit
- payments you choose to make to your employer to buy goods or services from them, for example, if you spend some of your wages on meals in the staff canteen
Service charges, tips, gratuities and cover charges don't make up your National Minimum Wage pay. To find out what this means if you receive tips as part of your pay and what responsibilities your employer has, visit:
Deductions and payments which reduce NMW pay are:
- refunds of any money you spent in connection with your work, for example the cost of purchasing tools or uniform
- refunds of any expenses you incurred doing your job, such as travel costs
- deductions to cover the cost of items your employer supplied to you that are needed for your job, for example, tools or uniform
- deductions for your employer’s own use and benefit for goods and services, for example transport they provide to and from work, regardless of whether you have the option of using the goods or services
'Benefits in kind'
Benefits in kind are anything your employer provides for your benefit apart from pay. Employers may offer you benefits in kind. However, an equivalent value in money for a benefit in kind can't be counted towards NMW pay, except for a set amount for accommodation.
Examples of benefits in kind which don’t count towards NMW pay are:
- a car
- your employer’s contribution to your pension fund
- help with removals
- medical insurance
- lunch vouchers
- child care vouchers
National Minimum Wage: accommodation
If your employer provides you with accommodation, they can count some of its value towards National Minimum Wage (NMW) pay. This is called the accommodation offset. Your employer cannot count more than the accommodation offset rate which is in force at any given time.
The offset rate for accommodation charges is £8.20 a day or £57.40 per week.
If an employer charges more than this, the difference is taken off your pay which counts for the minimum wage.
It makes no difference whether:
- your employer takes rent out of your wages
- you have to pay rent to your employer after receiving your wages
- your employer simply provides the accommodation as part of a package
In all cases, the accommodation offset rate is the most your employer can count towards NMW pay.
For more information on what counts as accommodation charges and their effect on minimum wage, visit:
Help getting paid the minimum wage
If you're not getting paid the National Minimum Wage or National Living Wage and think you should be, you can contact the ACAS Helpline for free, confidential advice or make a complaint about your employer. Your complaint will go to HM Revenue and Customs (HMRC). If HMRC find that the employer hasn't paid the minimum wage they will send them a notice for arrears and a fine.
You should start by trying to make sure you have calculated your pay correctly. Most employees have the right to be given a written document setting out their rate of pay or how it is calculated. If you think you are not getting the minimum wage you are entitled to, you should talk to your employer first.
If this doesn’t solve the problem, you can ask your employer in writing to see their payment records. The employer must produce the records within 14 days of your request, or at a date which you agree with them.
You can take someone with you to inspect the records, as long as your written request says that someone will be coming with you and you can copy the records.
You can also contact the Industrial Tribunals and Fair Employment Tribunal NI for help.
- that you took, or said you would take, any action to get what is due to you under the National Minimum Wage Act
- that your employer was prosecuted as a result
- that you qualify, or will or might qualify, for the NMW
You can also complain to a Tribunal if you believe your employer is victimising you in some other way, short of dismissal, for those reasons.
Advice NI offer free and impartial advice.
If you are a member of a trade union, you can get help, advice and support from them.