The National Minimum Wage and National Living Wage uplifts took effect from 1 April 2026. If you have not already confirmed that your payroll is fully compliant, that confirmation needs to happen today. HMRC enforcement is active, and the consequences of non-compliance have become considerably more serious over the past two years.
April 2026 rates
Common compliance failures
- Pay period miscalculation. Compliance is assessed per pay reference period. Workers paid monthly must receive at least the minimum wage for every hour worked in that month, including overtime.
- Unpaid working time. Travel between assignments, mandatory training, team briefings before shifts, and waiting time all count as working time for NMW purposes.
- Incorrect worker classification. Salaried, time, output, and unmeasured workers are assessed differently. Mis-categorising workers regularly produces underpayments.
- Uniform deductions. Requiring workers to purchase a uniform can reduce effective pay below the minimum wage if the deduction is not managed correctly.
- Age band errors. Workers moving into a new age band mid-year are sometimes not updated on payroll until the next review cycle. That gap is a breach.
- Tips and service charges. Following the Employment (Allocation of Tips) Act 2023, tips cannot be used to make up pay to the minimum wage.
- Apprentice rate applied too long. Once an apprentice is 19 or over and has completed the first year of their apprenticeship, they must move to the rate for their age group. Leaving them on the apprentice rate beyond that point is a breach.
Salary sacrifice and deductions
Salary sacrifice arrangements reduce the cash pay an employee receives. The NMW applies to cash pay after the sacrifice. A worker who sacrifices pay down to or near the minimum wage level may end up in technical breach territory if the sacrifice takes their effective hourly rate below the minimum.
HMRC enforcement — what you need to know
Naming-and-shaming was paused during Covid but is now back in full operation. The most recent published list included employers across hospitality, retail, care, and professional services. The penalties are significant:
- Arrears must be repaid at the current rate, not the rate in force when the underpayment occurred.
- A penalty of 200% of the arrears is applied, reduced to 100% if paid within 14 days.
- There is no cap on the total penalty for multiple workers.
- HMRC can investigate proactively — you do not need to have received a complaint.
Record-keeping obligations
Records must demonstrate compliance for every pay reference period and be retained for three years. Workers have the right to access their NMW records on request — you must respond within 14 days.
What to do now
- Confirm April 2026 rates are applied from the first pay period that includes 1 April 2026.
- Audit workers in the 18–20 age band specifically — highest percentage increase this year.
- Review salary sacrifice arrangements for NMW compliance, particularly for lower-paid workers.
- Audit your categories of working time — is all paid working time actually being paid?
- Check workers who have reached a new age band since the last review have been updated on payroll.
- Check apprentices are not being held on the apprentice rate beyond their entitlement.
- Confirm tips and gratuities are not being used as part of NMW calculations.
- Ensure record-keeping is complete and retrievable for at least the past three years.
A proactive audit now is considerably cheaper — in time, money, and reputation — than an HMRC investigation later.