What is the new minimum wage 2026? Gross pay and take-home explained

What is the new minimum wage 2026? Gross pay and take-home explained

If you're asking what is the new minimum wage 2026, the answer is clear: the National Living Wage (NLW) for workers aged 21 and over rises to £12.71 per hour from April 2026. This is a 50p increase on the previous rate of £12.21, representing a 4.1% uplift. The government accepted the Low Pay Commission's recommendations in full, and the new rates are now law under the National Minimum Wage (Amendment) Regulations 2026.

National Living Wage and National Minimum Wage rates from April 2026

The table below shows all the new hourly rates, as published by GOV.UK:

• National Living Wage (21 and over): £12.71
• 18-20 Year Old Rate: £10.85
• 16-17 Year Old Rate: £8.00
• Apprentice Rate: £8.00
• Accommodation Offset (per day): £11.10

The 18-20 rate saw the largest percentage increase at 8.5%, while the 16-17 and apprentice rates rose by 6%. The accommodation offset, which employers can use when providing living accommodation, increased by 4.1% to £11.10 per day.

Gross annual salary at the new NLW

For a full-time worker on a typical 37.5-hour week, the new NLW of £12.71 per hour gives a gross annual salary of £24,785 (calculated as £12.71 × 37.5 × 52 weeks). This is the figure before any deductions. For comparison, the UK median full-time gross annual pay is around £39,039, so the NLW remains below the median but continues to rise towards the government's target of two-thirds of median earnings.

Take-home pay: what you actually receive after deductions

Your take-home pay is the amount that lands in your bank account after Income Tax, National Insurance, pension contributions, and any student loan repayments are deducted. The Low Pay Commission's analysis shows that the impact of the NLW increase on take-home pay varies significantly by household type.

For a single person working full-time (35 hours/week): The weekly take-home pay increases by about £11.90, a 3.3% rise. This is less than the headline 4.1% wage increase because Income Tax thresholds remain frozen. As your gross pay rises, more of it falls into the taxable band, increasing your average tax rate.

For a couple with two school-aged children where one adult works full-time: This household still qualifies for Universal Credit regardless of hours worked. Because the Universal Credit standard allowance is rising by 6.2% (above the NLW increase), the household's take-home income increases by at least 4.2% – a bigger boost than the wage rise alone.

If you want to estimate your own take-home pay, try our take-home calculator for a personalised breakdown.

How the new minimum wage affects different households

The Low Pay Commission report highlights that NLW workers who receive Universal Credit benefit from a greater increase in take-home income than the 4.1% headline. In contrast, NLW workers who pay tax but do not receive UC see a smaller increase because of frozen tax thresholds. For example, a single person working 14 hours per week earns too much for UC and starts paying tax and National Insurance after 20 hours. The interaction of wages with the tax and benefit system means that the same hourly wage increase can have very different net effects.

Common deductions explained

• Income Tax: You have a Personal Allowance of £12,570 per year. Earnings above that are taxed at 20% (basic rate), 40% (higher rate), or 45% (additional rate). With the new NLW full-time salary of £24,785, you would pay tax on about £12,215, resulting in roughly £2,443 in Income Tax.
• National Insurance: Employees pay Class 1 NICs on earnings above £12,570 at 8% (main rate) up to a threshold, then 2% above that. For a £24,785 salary, NI would be around £977.
• Pension: If you're enrolled in a workplace pension, you'll contribute at least 5% of qualifying earnings (your employer pays 3%). This reduces your take-home pay but builds retirement savings.
• Student Loan: If you have a Plan 2 or Plan 5 loan, repayments are 9% of earnings above the threshold (e.g., £27,295 for Plan 2). At £24,785, you wouldn't repay unless you have a Plan 1 loan with a lower threshold.

For more detailed articles on salary and deductions, visit our salary articles section.

Scotland note: different Income Tax bands

If you live in Scotland, Income Tax rates and bands are set by the Scottish Parliament. The starter rate (19%), basic rate (20%), intermediate rate (21%), higher rate (42%), and top rate (47%) apply at different thresholds. The Personal Allowance remains the same (£12,570), but the point at which you start paying the higher rate is lower than in England. This means a full-time NLW worker in Scotland may have a slightly different take-home pay compared to someone in England or Wales.

Future outlook: two-thirds of median earnings target

The Low Pay Commission's remit states that two-thirds of median hourly earnings should continue to be the key reference point for future NLW rates. They project that two-thirds of median earnings for those aged 21 and over in October 2027 will fall in the range of £13.02 to £13.34, with a central estimate of £13.18. This suggests further above-inflation increases may be needed in future years to maintain the NLW's relative value.

Summary

The new minimum wage 2026 rates are now confirmed: £12.71 for those 21 and over, £10.85 for 18-20, and £8.00 for under-18s and apprentices. While the gross hourly increase is straightforward, your actual take-home pay depends on your tax code, benefits, pension, and whether you live in Scotland. Use our take-home calculator to see how the new rates affect your personal finances.

For more context on UK salary data, explore our salary data page.

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Disclaimer: Figures are public-statistics or calculator estimates for a single person with the standard Personal Allowance, no pension contributions and no student loan. Actual take-home pay varies by tax code, pension, Scottish rates, benefits in kind and other deductions. Always check your payslip and official GOV.UK guidance.