National Living Wage 2026: New Rates and Take-Home Pay

What is the National Living Wage in 2026/27?

From 1 April 2026, the National Living Wage (NLW) for workers aged 21 and over is £12.71 an hour. This is the legal minimum hourly rate most UK employers must pay — it is not optional, and it applies whether you are paid weekly, monthly or by the hour.

The NLW is part of the National Minimum Wage system. Younger workers and apprentices have separate, lower rates. The Living Wage Foundation publishes a higher voluntary 'real Living Wage' based on living costs — that is separate from the legal NLW set by the government.

How much is £12.71 an hour per year?

To convert an hourly rate to an annual salary, multiply by your hours per week, then by the number of weeks you are paid each year. On a standard full-time 37.5-hour week with 52 paid weeks, £12.71 an hour works out to about £24,785 gross a year.

If you work 40 hours a week at the NLW, gross pay rises to about £26,437 a year. Part-time workers on fewer hours will have proportionally lower annual pay — a 20-hour week at £12.71 is roughly £13,218 gross.

What is NLW take-home pay after tax?

Minimum wage figures are always quoted before tax. On the full-time £24,785 NLW salary (37.5 hours), you pay about £2,443 in income tax and £977 in National Insurance in 2026/27, leaving roughly £21,364 take-home — about £1,780 a month.

At 40 hours on the NLW, take-home is about £22,554 a year (£1,880 a month). You are a basic-rate taxpayer at this level — all taxable income is charged at 20%, with no higher-rate tax.

How do the younger worker rates compare?

Workers aged 18 to 20 must be paid at least £10.85 an hour. On a 40-hour week that is about £22,568 gross a year and roughly £19,769 take-home after tax and NI.

The 16–17 and apprentice rate is £8.00 an hour. At 40 hours a week, gross pay is £16,640 — below the £12,570 personal allowance for income tax, so only a small amount of tax and NI is due. Take-home is about £15,500 a year.

• 18–20 at 40 hrs/week: ~£22,568 gross, ~£19,769 take-home.
• 16–17 at 40 hrs/week: ~£16,640 gross, ~£15,500 take-home.
• Apprentice rate applies in the first year of an apprenticeship; it rises after that.

NLW vs National Minimum Wage — what is the difference?

The National Living Wage is simply the name for the highest minimum wage band — it applies to workers aged 21 and over. Everyone on minimum wage is on the National Minimum Wage system; the NLW is the top tier within it.

Before April 2024, the NLW applied from age 23. It now applies from 21, which brought more young workers onto the higher rate. Employers must pay the correct band for each worker's age — paying a 19-year-old the NLW rate is fine, but paying them less than £10.85 is illegal.

What counts towards minimum wage pay?

Your average hourly pay over a pay reference period (usually a month) must meet the minimum. Most earnings count — basic pay, bonuses, commission and tips paid through payroll. Some deductions do not count, and unpaid breaks reduce your effective hourly rate.

If you are paid a salary rather than an hourly rate, divide your gross pay by the hours you actually worked in the period to check you are above the minimum. Overtime at a higher rate can help, but your average must still clear the floor.

• Counts: basic pay, bonuses, commission, contractual tips.
• Does not reduce the minimum: employer pension contributions above the legal minimum.
• Can reduce effective rate: unpaid breaks, salary sacrifice below the minimum, unpaid work trials.

What if you are paid below the minimum?

Employers who pay below the legal minimum can be fined and required to back-pay workers. If you think you are underpaid, start by checking your payslip and contract, then raise it with your employer.

If that does not resolve it, contact HMRC's National Minimum Wage team or Acas for free advice. Keep records of your hours worked and pay received — you can report anonymously in some cases.

Is the NLW enough to live on?

The NLW is a legal floor, not a living-cost estimate. The Living Wage Foundation calculates a higher voluntary rate based on what households need — often several pounds above the NLW. At £21,364 take-home on full-time NLW hours, rent, energy and food still take a large share in many parts of the UK.

Benefits such as Universal Credit may top up low earnings if your household qualifies. Our Universal Credit guide explains how earned income affects an award. For budgeting, our Monthly Budget Planner can help map essentials against your actual take-home pay.

Convert your hourly rate to annual pay

Use our Hourly to Salary Calculator to convert any hourly rate — including the NLW — to weekly, monthly and annual gross pay, and check it against the correct minimum wage band for your age. Then use the PAYE Salary Calculator to see take-home pay after tax, National Insurance, pension and student loan.