What's Minimum Wage in 2026/27? Take-Home Pay Explained

What's Minimum Wage in 2026/27?

If you're wondering what's minimum wage for the current tax year, the answer depends on your age. From April 2026, the National Living Wage (NLW) for workers aged 21 and over is £12.71 per hour. For 18–20 year olds it's £10.85 per hour, and for under-18s and apprentices it's £8.00 per hour. These rates are set by the government and apply across the UK.

But the headline hourly rate is only part of the story. What you actually take home after deductions – Income Tax, National Insurance, pension contributions, and possibly student loan repayments – is what matters for your budget. This article explains how take-home pay is calculated for minimum wage workers in 2026/27.

Gross Salary on the National Living Wage

For a full-time worker aged 21+ working 37.5 hours per week (a common full-time contract), the annual gross salary is:

£12.71 × 37.5 hours × 52 weeks = £24,785 per year

If you work 40 hours per week, gross pay rises to £26,437 per year. Monthly gross pay is roughly £2,065 (37.5 hours) or £2,203 (40 hours).

How Take-Home Pay Is Calculated

Your employer deducts Income Tax and National Insurance through the PAYE system before paying you. If you're enrolled in a workplace pension, that contribution is also taken from your gross pay (or from your qualifying earnings, depending on the scheme). Student loan repayments, if applicable, come off too.

Income Tax

For 2026/27, the Personal Allowance is £12,570 – you pay no tax on this amount. Earnings above that are taxed at 20% (Basic rate) up to £50,270. On a £24,785 salary:

• Taxable income = £24,785 – £12,570 = £12,215
• Income Tax = 20% × £12,215 = £2,443 per year

National Insurance

Employee National Insurance is 8% on earnings between £12,570 and £50,270 (the Primary Threshold). On £24,785:

• NIable earnings = £24,785 – £12,570 = £12,215
• National Insurance = 8% × £12,215 = £977 per year

Take-Home (Tax and NI Only)

Gross pay minus Income Tax and NI:

£24,785 – £2,443 – £977 = £21,364 per year

That's about £1,780 per month or £410 per week. Your effective tax rate is around 14%.

Scotland: A Slightly Different Picture

Scotland sets its own Income Tax bands. For 2026/27, the starter rate of 19% applies to the first £3,967 of taxable income, then 20% up to £29,526. On the same NLW salary, Scottish Income Tax is about £2,403 – roughly £40 less than in rUK. So take-home in Scotland is £21,404 per year (£1,784 per month).

What About Pension Contributions?

Most employees aged 22+ are automatically enrolled into a workplace pension. The minimum employee contribution is 5% of qualifying earnings (typically earnings between £6,240 and £50,270). On £24,785, a 5% contribution on full gross would be about £1,239 per year, but many schemes use qualifying earnings, which reduces the deduction. A typical 5% contribution (on full gross) would reduce take-home to around £20,623 per year in rUK.

Student Loan Repayments

Most student loan plans have thresholds above NLW earnings:

• Plan 1: £26,900
• Plan 2: £29,385
• Plan 4 (Scotland): £33,795

At 37.5 hours per week, you're below these thresholds, so no repayment. At 40 hours per week (£26,437), Plan 5 (threshold £25,000) would trigger a 9% repayment on the excess – about £129 per year. The Postgraduate Loan threshold is £21,000, so 6% repayments apply on earnings above that, which could affect take-home pay for graduates with a postgraduate loan.

Take-Home for Younger Workers

• 18–20 year olds on £10.85/hr (37.5 hrs): gross £21,158, take-home about £18,753 per year (£1,563 per month)
• Under-18s and apprentices on £8.00/hr (37.5 hrs): gross £15,600, take-home about £14,752 per year (£1,229 per month)

Key Takeaways

• What's minimum wage in 2026/27 is £12.71/hr for ages 21+, but your take-home depends on hours, tax code, pension, and student loans.
• A full-time NLW worker in England takes home roughly £1,780 per month after tax and NI.
• Scotland offers a slightly higher take-home due to lower tax on the first slice of income.
• Pension contributions and student loans can reduce take-home further.

For a personalised calculation, use our take-home calculator or browse our salary articles for more detailed guides.

Disclaimer

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

Sources: GOV.UK National Living Wage rates, HMRC Income Tax and National Insurance bands, ONS ASHE for median earnings context.