From April 2026, the National Minimum Wage rates will increase once again, driving up employment costs for many businesses and requiring them to review their payroll processes.
If you haven’t considered how these new rates will affect your business, you should do so now.
What’s changing in minimum wage rates?
From April 2026, the new rates will be:
| Current rate | New rate from 6 April | |
| 21 and over (National Living Wage) | £12.21 per hour | £12.71 per hour |
| 18–20 | £10 per hour | £10.85 per hour |
| Under 18 | £7.55 per hour | £8.00 per hour |
| Apprentices | £7.55 per hour | £8.00 per hour |
These rates are mandatory and businesses must comply to avoid penalties. This includes making sure that their payroll processes are up to date and account for employees’ ages changing and any deductions that could affect their base pay.
Steps to prepare
As the clock is now ticking to the new rates being introduced, employers should:
- Review payroll and costs: Check how the increase will affect your payroll and plan for higher labour costs.
- Update systems and contracts: Ensure payroll systems are updated to reflect the new rates, including reviewing employment contracts and employee records.
- Assess pay scales: The wage rise could create pay compression. Review your pay scales to ensure fair compensation for more experienced or qualified staff.
- Consider pricing and efficiency: You may need to adjust prices or improve efficiency to offset higher wage costs.
- Communicate with employees: Inform your staff about the wage rise and any adjustments to pay structures.
By updating your business processes, you can manage the National Minimum Wage increases effectively without disruption. If you need any support with these payroll changes, please get in touch.
