National Minimum Wage rates are rising – Is your payroll process prepared?

The National Minimum Wage rates are increasing again from 1 April 2026, which is likely to increase employment costs and force employers to review their payroll processes.

How are the National Minimum Wage rates changing?

From April 2026, the new rates will be:

	Current rate	New rate from 1 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, so you should ensure that your payroll processes are up to date and account for changes to an employee’s circumstances, such as their age, as this could affect their base pay.

Time to prepare

Would recommend that employers:

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.