Three different figures — here's what each one is
You will see three different numbers described as "minimum wage" in headlines and job adverts. They are not the same thing.
The National Living Wage is the government's statutory minimum for workers aged 21 and over. Employers must pay it by law.
The National Minimum Wage covers workers under 21 and apprentices. Lower rates apply depending on age.
The Real Living Wage is a voluntary rate calculated by the Living Wage Foundation, based on actual living costs. It is higher than the government minimum. Some employers choose to pay it — many do not. There is no legal obligation to pay it.
If you see a job advertised as paying the "Real Living Wage", that is an employer choice, not a legal requirement. If an employer says they pay the "National Living Wage", they are referring to the statutory minimum they are legally required to pay.
Current rates from April 2025 — verify at GOV.UK for the latest
Rates change every April. The figures below apply from April 2025.
Check https://www.gov.uk/national-minimum-wage-rates to confirm current rates.
Statutory minimum hourly rates from April 2025
| Age group | Rate per hour | Name |
|---|---|---|
| 21 and over | £12.21 | National Living Wage |
| 18 to 20 | £10.00 | National Minimum Wage |
| 16 to 17 | £7.55 | National Minimum Wage |
| Apprentice | £7.55 | National Minimum Wage |
Minimum wage applies to salaried workers too
Most people assume minimum wage only matters if you're paid hourly. It doesn't — it applies to most workers regardless of how they're paid: hourly, daily, weekly, annual salary, piece rate, or commission.
If you are on an annual salary, divide your annual pay by the total hours you actually work each year. If that figure comes out below the minimum wage rate for your age, your employer is breaking the law — regardless of what your contract says.
This catches salaried workers on modest salaries who are expected to work significant unpaid overtime. If your contract says 37.5 hours a week but you regularly work 55, your effective hourly rate may be below the minimum. It is worth checking.
What counts toward minimum wage — and what doesn't
Not everything your employer pays you counts toward the minimum wage calculation. Getting this wrong is one of the most common sources of underpayment.
Counts toward minimum wage:
- Basic pay
- Some productivity bonuses and piece-rate payments
- Tips paid through payroll (since the Employment (Allocation of Tips) Act 2023 came into force)
Does not count toward minimum wage:
- Tips paid in cash directly by customers
- Overtime premiums and shift allowances (the premium element above basic rate)
- Expenses reimbursements
- Loans and advances
- Uniforms or equipment costs that are deducted from your pay
There is a separate accommodation offset if your employer provides accommodation — a fixed daily amount can be offset against the minimum wage calculation. Verify the current offset amount at GOV.UK.
Who is not entitled to the minimum wage
The minimum wage applies to most workers, but there are exceptions. Self-employed people are not covered — the minimum wage only applies to employees and workers, not people working for themselves.
Other exceptions include: voluntary workers and volunteers; some work experience placements and internships (rules are narrow — verify at GOV.UK if uncertain); company directors who are not workers; family members of a business owner who live in the family home and participate in the business.
Apprentices under 19, or apprentices over 19 who are in their first year, qualify for the apprentice rate rather than the full minimum wage for their age. After the first year of an apprenticeship, apprentices aged 19 or over must be paid at least the rate for their age.
What to do if your employer pays below the minimum wage
Check your payslips first. Calculate your effective hourly rate based on hours actually worked. If you believe you are being paid below the minimum wage:
Step 1: Raise it with your employer informally. Sometimes it is a payroll error rather than deliberate underpayment.
Step 2: If your employer does not correct it, you can report it to HMRC using the online tool at https://www.gov.uk/report-underpayment-of-national-minimum-wage-or-living-wage. HMRC can investigate and force the employer to pay any arrears owed.
Step 3: You can also make a claim to an employment tribunal if your employer refuses to pay. There is no qualifying period for a minimum wage claim — it applies from day one of employment.
Employers who break minimum wage law can be fined up to 200% of the underpayment, with a maximum penalty of £20,000 per worker. HMRC publishes a list of employers who have been found to have paid below minimum wage.
If you are unsure whether you have a case or want advice before taking action, call ACAS on 0300 123 1100. The call is free.
The Real Living Wage
The Real Living Wage is calculated annually by the Living Wage Foundation, based on what people actually need to cover basic living costs. There is a UK rate and a higher London rate.
Paying the Real Living Wage is voluntary. Around 15,000 employers are accredited Living Wage employers — they have committed to pay all direct employees and regular contractors at or above the rate. Many well-known companies and public sector employers are accredited.
If you want to find out if your employer is accredited, or if you are an employer considering accreditation, search the Living Wage Foundation's employer directory at https://www.livingwage.org.uk.
The Real Living Wage is not the National Living Wage. They are calculated by different bodies, updated on different schedules, and are entirely separate. The Living Wage Foundation's rate is higher, but it carries no legal obligation.
Get updates when minimum wage rates change, plus plain-English guides to your employment rights.
Common questions about minimum wage
What is the difference between the National Living Wage and National Minimum Wage?▾
The National Living Wage is the higher government minimum that applies to workers aged 21 and over. The National Minimum Wage covers workers under 21 and apprentices, with lower rates for each age group. Both are statutory — employers must pay them by law. Neither is the same as the Real Living Wage, which is a voluntary rate set by the Living Wage Foundation.
Does minimum wage apply if I'm on a salary?▾
Yes. Minimum wage applies regardless of how you are paid. If you are salaried, your employer must ensure your total pay, divided by the hours you actually work, meets the minimum wage for your age group. Regular unpaid overtime can take your effective hourly rate below the legal minimum even if your nominal salary appears adequate.
Can my employer deduct things from my wages that take me below minimum wage?▾
No. Deductions from wages — for uniforms, equipment, or anything else — cannot take your pay below the national minimum wage. If deductions would put your effective hourly rate below the minimum, the deductions are not lawful. There are some limited exceptions, such as the accommodation offset, but these are narrow and specific. If this is happening to you, raise it with your employer and contact ACAS if needed.
What should I do if I think I'm being underpaid?▾
Start by calculating your effective hourly rate: total pay divided by total hours worked, including any unpaid overtime. If it falls below the minimum for your age, raise it with your employer first. If they do not correct it, report it to HMRC using the online underpayment reporting tool at GOV.UK. HMRC can investigate and force the employer to pay arrears. You can also contact ACAS on 0300 123 1100 for free advice.
Are apprentices entitled to minimum wage?▾
Yes, but at the lower apprentice rate if they are under 19, or if they are 19 or over and in the first year of their apprenticeship. After the first year, apprentices aged 19 or over must be paid at least the minimum wage rate for their age — not the apprentice rate. The April 2025 apprentice rate is £7.55 per hour.
Does minimum wage increase automatically every year?▾
The government normally reviews and increases the rates each April following recommendations from the Low Pay Commission. Increases are not automatic by law — they require an Order to be laid before Parliament — but in practice they have increased every April. Some years see larger increases than others. Always check GOV.UK in March or April to confirm the new rates.
Is the Real Living Wage the same as the National Living Wage?▾
No. The National Living Wage is the statutory minimum set by the government for workers aged 21 and over. The Real Living Wage is a voluntary rate calculated by the Living Wage Foundation, based on actual living costs. It is higher than the government minimum. Employers who pay the Real Living Wage have chosen to do so — there is no legal obligation.
Do tips count toward minimum wage?▾
Tips paid through payroll can count toward minimum wage calculations, but tips paid in cash directly by customers to workers do not. Following the Employment (Allocation of Tips) Act 2023, employers are legally required to pass on 100% of tips, gratuities, and service charges to workers — they cannot be used to make up basic wages. Verify how your tips are structured and check GOV.UK for the current rules.
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