National Minimum Wage What is the National Minimum Wage? Understand current rates, who qualifies, and what counts towards minimum wage pay.
Last updated: 30 January 2025 The National Minimum Wage sets the legal minimum hourly rate that employers must pay workers.
Current Rates
2024-25 Rates (from April 2024)
Age Group Hourly Rate 21 and over (National Living Wage) £11.44 18 to 20 £8.60 Under 18 £6.40 Apprentice rate £6.40
When Rates Change
New rates apply from April each year
Government announces in advance
Employers must update pay
Check gov.uk for latest
Apprentice Rate
Applies to apprentices who are:
Condition Rate Under 19 £6.40 19+ in first year of apprenticeship £6.40 19+ past first year Age-appropriate rate
Who Is Entitled
Almost All Workers
Worker Type Entitled? Full-time employees Yes Part-time employees Yes Agency workers Yes Zero-hours contracts Yes Casual workers Yes Piece workers Yes
Not Entitled
Category Why Not Genuinely self-employed Not workers Volunteers Not paid Company directors (not workers) Not workers Family members (family business) Specific exemption Work experience (up to 1 year) If part of HE/FE course Armed forces Separate rules
How Minimum Wage Works
Hourly Calculation
For each pay period:
Total pay ÷ Total hours = Hourly rate
Hourly rate must be ≥ minimum wage
Pay Reference Period
Period Minimum Wage Check Weekly pay Each week Monthly pay Each month Other Per pay period
What Counts as Pay
Included
Payment Counts? Basic hourly rate Yes Incentive pay Yes Bonuses Yes Commission Yes Performance pay Yes
Not Included
Payment Counts? Overtime premium No (only basic rate) Tips/gratuities No Expenses No Benefits in kind No Premium for unsocial hours No Loans No
Example
Worker paid:
Basic: £10/hour
Overtime premium: +£5/hour for overtime
Tips: £20 per shift
Only the £10 basic rate counts for minimum wage calculation.
Accommodation Offset
What It Is
If employer provides accommodation:
Element Detail Offset Can count some value towards pay 2024-25 limit £9.99 per day Maximum weekly £69.93
How It Works
Charge Effect Free accommodation Offset adds to pay calculation Charging for accommodation Deducts from pay calculation Charge over offset Reduces pay below minimum wage
Deductions and Minimum Wage
Permissible Deductions
Even if reducing pay below NMW:
Deduction Allowed? Tax/NI Yes Pension contributions Yes Student loan Yes Court orders Yes
Deductions That Count
May take pay below NMW if for employer's benefit:
Deduction Issue Uniform Reduces NMW pay Equipment Reduces NMW pay Till shortages Reduces NMW pay
Example Problem
Worker paid £11.44/hour:
Employer deducts £10/week for uniform
40-hour week: £457.60 gross
Minus £10: £447.60
Hourly: £11.19 - below minimum wage
Types of Work
Time Work
Standard hourly work:
Feature Treatment Clocked hours Paid per hour Minimum wage applies To each hour
Salaried Work
Annual salary converted:
Calculation Method Annual salary ÷ 12 Monthly hours Count all worked Check hourly Against minimum wage
Output Work (Piece Rates)
Paid per item produced:
Requirement Rule Fair estimate Of output per hour Times 1.2 To get piece rate Must equal NMW When calculated
Unmeasured Work
No set hours:
Type Treatment Daily rate Must average NMW Agreement On typical hours
Working Time
What Counts as Hours
Activity Counts? Working Yes Training (required) Yes Travel (during work) Yes On-call (at workplace) Yes Sleep-in shifts Complex rules
What Doesn't Count
Activity Counts? Commuting No Rest breaks No On-call (at home) Usually no
Checking Your Pay
Calculate Yourself
Step Action 1 Add up hours worked in pay period 2 Check gross pay (before deductions) 3 Remove non-counting elements 4 Divide pay by hours 5 Compare to minimum wage for your age
Example
Element Amount Hours worked 45 Gross pay £500 Less tips (£15) £485 Hourly £10.78 Minimum (21+) £11.44 Result Underpaid
If You're Underpaid
Internal Steps
Step Action Check calculation Be sure of facts Raise with employer Give them chance Written complaint If not resolved
External Help
Body Help With ACAS Advice and conciliation HMRC Enforcement and complaints Citizens Advice General guidance
Making a Complaint
To HMRC:
Online: gov.uk
Phone: 0300 123 1100
Confidential
Can trigger investigation
Employer Penalties
For Non-Compliance
Penalty Amount Arrears Full amount owed Penalty 200% of arrears (up to £20k per worker) Naming Public naming of offenders Criminal In serious cases
Practical Tips
For Workers
Tip Why Keep records Of hours worked Check payslips Against hours Know your age rate May change at birthday Query shortfalls Promptly
Common Issues
Problem Watch For Unpaid training Should count Working through breaks Should be paid Deductions May take you below NMW Wrong age rate Check correct rate
Recent Changes
National Living Wage Extension
Change Detail Previously NLW for 23+ From April 2024 NLW for 21+ Effect Higher rate for younger workers
Tips Legislation
Change Detail From October 2024 Tips must be passed to workers Cannot count Towards minimum wage Must distribute Fairly and promptly
Frequently Asked Questions
What is the National Minimum Wage 2024-25? From April 2024: £11.44/hour for workers 21+, £8.60 for 18-20, £6.40 for under 18, and £6.40 apprentice rate. The higher rate for 21+ is called the National Living Wage.
Who is entitled to minimum wage? Almost all workers are entitled to minimum wage, including part-time, agency, and zero-hours workers. Only genuinely self-employed people, volunteers, and some specific categories (like family members in family businesses) are excluded.
What counts towards minimum wage? Basic pay, incentive pay, and bonuses count. Overtime premium (extra for overtime), tips, expenses, benefits in kind, and accommodation (above an offset) don't count towards calculating minimum wage. Disclaimer: This information is for general guidance only and does not constitute legal advice. Employment law is complex and changes frequently. For specific situations, consult ACAS, a qualified employment lawyer, or HR professional.