Minimum Wage
The National Minimum Wage (NMW) and National Living Wage (NLW) are UK legal minimum hourly pay rates varying by age, with enforcement by HMRC.
legal-terms
Category
beginner
Difficulty
5 min read
Read time
2025-01-15
Updated
Definition
Short definition
The National Minimum Wage (NMW) and National Living Wage (NLW) are UK legal minimum hourly pay rates varying by age, with enforcement by HMRC.
Detailed explanation
The UK has a statutory minimum wage that all employers must pay. The National Living Wage (NLW) applies to workers 21 and over. National Minimum Wage (NMW) rates apply to younger workers and apprentices.
From April 2024: NLW (21+) is £11.44/hour. NMW for 18-20 is £8.60/hour, 16-17 is £6.40/hour, apprentices £6.40/hour. Rates increase annually each April.
HMRC enforces compliance. Underpayment leads to repayment of arrears plus penalties up to 200% of arrears, public naming, and director disqualification.
Practical guidance
How it works
Calculate total pay divided by hours worked. Must meet minimum for relevant age band. Include all working time. Update rates each April.
Best practices
Review rates every April
Track all working time accurately
Check deductions dont reduce below min
Monitor age changes for rate increases
Audit regularly for compliance
Legal context
Legal basis
National Minimum Wage Act 1998
Jurisdiction: United Kingdom
Key provisions
National Living Wage: £11.44 (21+)
NMW 18-20: £8.60
NMW 16-17: £6.40
Apprentice rate: £6.40
Rates change annually in April
HMRC enforcement
Official source
Frequently asked questions
What is minimum wage in 2024?
From April 2024: £11.44/hour for 21+, £8.60 for 18-20, £6.40 for 16-17 and apprentices. Rates increase annually each April.
Does travel time count for minimum wage?
Time traveling between work assignments counts. Commuting from home to first job and last job home usually doesnt, but check specific circumstances.
Related glossary terms
Working Time Regulations
The Working Time Regulations 1998 implement EU law in the UK, limiting average working hours to 48 per week and providing minimum rest breaks and annual leave.
Overtime Rate
Overtime rate measures the proportion of total hours worked that exceed standard working hours, indicating workload pressure and potential burnout risk.