National minimum wage – national minimum wage rates and overview

The national minimum wage (NMW) is a legal right to a minimum hourly rate of pay covering almost all workers in the UK.

This guide gives you an overview of the NMW – it provides a summary of the key elements and explains your main responsibilities as an employer.

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National minimum wage rates

There are four national minimum wage (NMW) rates. From 1 October 2012 the following rates apply:

• £6.19 per hour for workers aged 21 years old and over
• £4.98 per hour for workers aged 18 to 20 years old
• £3.68 per hour for workers above school leaving age but under 18 years old
• £2.65 for apprentices under the age of 19 years old or aged 19 years old or over and in the first year of their apprenticeship
• £4.82 per day for accommodation offset rate

The age threshold for the main rate (the rate for workers aged 21 years old and over) was reduced from 22 to 21 on 1 October 2010.

It is good practice to display information about current NMW rates in your workplace.

Any changes to the NMW rates usually take place in October each year. If changes are announced, this page will be updated to display the new rates. Old NMW rates can be viewed at National minimum wage rates since 1999- Opens in a new window.

If a worker is entitled to the NMW, you must pay them at least the rate they are entitled to for the hours of work that qualify for NMW pay. You cannot make an agreement with a worker to pay them less than the NMW.

Which rate applies to a worker?

You need to know which rate applies to a worker – based on their entitlement at the start of each pay reference period. The 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 the page on national minimum wage pay reference period in our guide on national minimum wage – calculating national minimum wage pay – the basics.

For example, at age 20 a worker is entitled to the 18 to 20 year old rate. From the first pay reference period starting on or after their 21st birthday, they become entitled to the main 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 main rate of NMW from the Saturday after their birthday.

As the rates are age related, you may need to ask workers to provide proof of their age.

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Who should be paid the national minimum wage?

Most people above compulsory school age working legally in the UK – which does not include the Channel Islands or the Isle of Man – are entitled to be paid the national minimum wage (NMW).

Workers entitled to the NMW include:

• part-time workers
• casual labourers
• agency workers
• piece workers, including homeworkers

Workers are entitled to the NMW whether or not they have a written employment contract.

For more information see our guide on national minimum wage – who must be paid the national minimum wage.

Workers not entitled to the NMW

Some people who work in the UK are not entitled to the NMW. They include:

• genuinely self-employed people
• company directors (except when they are working under a contract of employment)
• workers still of compulsory school age – see our guide on employing young people
• students on a work placement of less than one year that is undertaken as part of a UK further education or higher education course
• people taking part in the European Union’s Leonardo da Vinci, Youth in Action, Erasmus and Comenius programmes
• residential members of a charitable community whose purpose is to practice or promote a belief of a religious or similar nature
• people taking part in certain government or EU funded schemes and programmes
• people employed in a Jobcentre Plus Work Trial for a period in excess of six weeks provided the trial is intended to last less than six weeks – and those taking part in some other government employment programmes

For more information see our guide on national minimum wage – who need not get the national minimum wage.

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What counts as national minimum wage pay

What counts as pay for national minimum wage (NMW) 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 national minimum wage pay. If you provide living accommodation a set amount may count towards national minimum wage pay.

You must make sure you pay your workers who are entitled at least the NMW. To see whether a worker’s pay is in line with the NMW, you must calculate it in a particular way.

Only particular elements of a worker’s pay can count towards their NMW pay. For example loans, pension payments, redundancy payments and the premium element of overtime pay do not count towards NMW pay. Also, some deductions and payments from workers will reduce NMW pay. For more information, see our guide on national minimum wage – calculating national minimum wage pay – the basics.

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Calculating national minimum wage pay

The hours for which you must pay your workers the national minimum wage (NMW) depend on which type of work they are doing.

There are four types of work for NMW purposes:

• time work – paid according to the number of hours worked: see our guide on national minimum wage – hours for which the national minimum wage must be paid – time work
• salaried-hours work – paid for a pre-determined number of hours a year and contractually entitled to an annual salary for those hours that is paid in equal instalments – see our guide on national minimum wage – hours for which the national minimum wage must be paid – salaried-hours work
• output work – paid according to each piece produced or task performed with no fixed hours of work – see our guide on national minimum wage – hours for which the national minimum wage must be paid – output work
• unmeasured worker – paid a set amount for a task or for working a certain length of time, such as a week – see our guide on national minimum wage – hours for which the national minimum wage must be paid – unmeasured work 

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National minimum wage records and reporting – best practice

You are legally required to keep sufficient records to show you are complying with the national minimum wage (NMW) 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 NMW and there is no need to maintain separate records specifically for NMW 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 NMW 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 NMW.

For information on record-keeping, see our guide on national minimum wage – record keeping.

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National minimum wage enforcement and penalties

The national minimum wage (NMW) 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 employment 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 NMW 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 NMW, 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 NMW to workers if it is due. If you discover you have paid your workers below NMW rates, you must pay any arrears of NMW to the workers immediately.  NMW 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 NMW they find are outstanding at the start of their investigation.  They may also impose a penalty.

For more information see our guide on national minimum wage – record keeping.

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National minimum wage – the Pay and Work Rights Helpline

You can get advice or find out more about the national minimum wage (NMW) by contacting the Pay and Work Rights Helpline on Tel 0800 917 2368 or completing the online enquiry form on the Directgov website- Opens in a new window. You can also make a complaint if you believe a worker is being paid under the NMW rate they are entitled to. You can do this by either ringing the Helpline or completing the online complaint form on the Directgov website- Opens in a new window.

If workers believe they aren’t being paid the NMW they should telephone the Pay and Work Rights 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 NMW when it is due may also make a claim through an employment tribunal or civil court.

As well as the NMW, the Pay and Work Rights Helpline also covers:

• the agricultural minimum wage
• employment agency standards
• working time
• working conditions relating to Gangmaster licensing standards

The Pay and Work Rights Helpline is open 08.00 – 20.00 Monday to Friday and 09.00 – 13.00 on Saturday. Calls from a landline are free and charges may vary from mobile phones. The Helpline can take calls in over 100 languages.

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