National Minimum Wage - 2025

The National Minimum Wage, or NMW, receives a review every year by the government. While there’s no commitment to increase the amount each year, the rate of hourly pay can change when deemed appropriate, so it’s good to keep a keen eye on it no matter what.

If your business has employees, you need to pay them the National Minimum Wage, or the minimum pay per hour for each hour they work. Checking these rates regularly is crucial, as failing to increase your employee’s pay to match any updated rates is breaking the law. 

Before very recently, something called the ‘naming and shaming’ of businesses meant exactly what you’d think! Calling out your business for failing to comply would bring negative publicity that ultimately would reflect very poorly on you and your business. The ‘naming and shaming’ government initiative is no longer in place, but the law hasn’t changed. You must make sure to pay the minimum wage for workers.

With that in mind, here’s everything you need to know and how to remain compliant with the changes.

What is the National Minimum Wage?

The National Minimum Wage came into force in July 1998 via the National Minimum Wage Act. It defines a minimum hourly rate you should pay your employees and workers.

These rates are subject to review and often change in April every year.

How much is the National Minimum Wage?

Current rates

Because the rates change, it’s important to keep on top of them. It’s worth reviewing your pay structure every April to ensure you’re not dipping below the legal requirement. The National Living Wage is very similar, in that it is the minimum wage rates of pay for employees aged 21 and over.  

The hourly rate depends on the individual’s age, and whether they’re an apprentice. The minimum wage for 18-year-olds is different to the minimum wage for 21-year-olds, for example.

From April 2025, the National Minimum Wage rates will be as follows:

• National Living Wage (21+): £12.21 
• 18–20-Year-Old Rate: £10.00 
• Under 18 Rate: £7.55 
• Apprentice Rate: £7.55 

The above is the basic minimum hourly wage UK workers should receive based on their age bracket.

Apprentices

Apprentices are entitled to the apprentice rate if they’re either:

• aged under 19
• aged 19 or over and in the first year of their apprenticeship

The National Minimum Wage over the age of 25

Prior to 1 April 2021, the National Living Wage was for those aged 25 and over. The bracket was then reduced to 23 and over, and then once again to 21 and over. The current rate for 21 and over applies to every age over 21. A 70-year-old will earn the same on the National Minimum Wage as a 30-year-old.

Do I have to pay the National Minimum Wage to apprentices?

You must pay at least the National Minimum Wage, yes. However, you can pay above this amount if you feel it’s appropriate.

There are additional rules when it comes to apprentices and minimum wage. When they reach a certain age, for example, the situation changes, and another is when they’re no longer in the first 12 months of their apprenticeship.

How do I ensure I'm paying the National Minimum Wage?

A common reason employers get caught out is they deduct the cost of uniforms and other expenses from employees’ wages. This dips staff below what they’re legally required, and this is counted as breaking the law.

Another reason for these types of mistakes in pay is the failure to pay for travel time where travel is a crucial part of the individual’s job role.

Different hours of work

If your employee is paid minimum wage on an annual salary, you should determine how many basic hours they work to ensure they’re getting the minimum wage as take-home pay. You can determine whether they’re working salaried hours if:

• Their contract states how many hours they work in return for their salary
• They’re paid in equal, regular instalments
• There is no more than a month between each payment
• They don’t get paid more than once a week

What if they work part-time? The same rules apply to part-time minimum wage payments. As an example, an employee works 1,200 hours a year based on their contract. They’re 22 years of age and the eligible minimum wage for them is £12.21 per hour. He gets paid monthly, so each pay packet covers an average of 100 hours. Therefore, he’ll receive £1,221 a month. This is how you work out the minimum wage for part-time workers in the UK.

The National Minimum Wage in the UK is taken very seriously, and failure to pay it has severe consequences.

To ensure compliance it’s worth conducting a salary benchmarking review. This has the additional benefit of keeping your rates competitive.

Expert support

If you still have queries about the National Minimum Wage, download your free guide by clicking the button below or speak to a Croner expert on 0808 501 6651.