National Living Wage
UK tax glossary · Last reviewed: April 2026
The National Living Wage (NLW) is the statutory minimum wage for workers aged 21 and over. From April 2026 the rate is £12.21 per hour. Separate rates apply to younger workers and apprentices under the National Minimum Wage framework.
Employers who pay below the NLW face penalties of up to 200% of the underpayment, public naming, and potential criminal prosecution. HMRC enforces compliance through the NMW/NLW team. Workers can report underpayment anonymously to the Acas helpline.
The NLW is increased each April following recommendations from the Low Pay Commission. It forms the reference point for many statutory pay calculations, including qualifying pay for auto-enrolment pension purposes.
Common questions
Does salary sacrifice reduce my pay below the National Living Wage?
Salary sacrifice cannot reduce your pay below the NLW. Employers must ensure contractual pay remains above the minimum before any sacrifice arrangement is applied.
Are tips and gratuities included when calculating NLW compliance?
No. Since April 2023, tips and gratuities cannot be counted toward the minimum wage. Employers must pay the full NLW from payroll before tips are distributed.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.