What is the minimum wage in the UK in 2026? Gross pay, deductions and take-home pay explained

Understanding the minimum wage in the UK for 2026/27

If you're wondering what is the minimum wage in UK for the current tax year, the answer depends on your age and whether you are an apprentice. From 1 April 2026, the National Living Wage (NLW) for workers aged 21 and over is £12.71 per hour. This is a 4.1% increase from the previous rate of £12.21, as confirmed by GOV.UK National Living Wage rates. For younger workers, the National Minimum Wage (NMW) rates are £10.85 for 18-20 year olds, £8.00 for under 18s, and £8.00 for apprentices.

These rates are set following recommendations from the Low Pay Commission and apply across England, Scotland, Wales, and Northern Ireland. The Government expects the NLW to remain ahead of the cost of living for the 2026/27 year, though interactions with tax and benefits can affect real-terms increases.

Gross pay vs take-home pay: what deductions apply?

Your gross salary is the amount you earn before any deductions. For a full-time worker on the NLW working 37.5 hours per week, gross annual pay is approximately £24,785 (£12.71 × 37.5 × 52). However, your take-home pay (net pay) will be lower because of deductions for Income Tax, National Insurance, and possibly pension contributions or student loan repayments.

Income Tax

For the 2026/27 tax year, the standard Personal Allowance is £12,570 per year. This means you pay no Income Tax on the first £12,570 of your earnings. Above that:

• Basic rate (20%) applies to earnings between £12,571 and £37,700
• Higher rate (40%) applies to earnings between £37,701 and £125,140
• Additional rate (45%) applies to earnings above £125,140

A full-time NLW worker earning £24,785 falls within the basic rate band. They will pay 20% Income Tax on £12,215 (£24,785 – £12,570), which is about £2,443 per year.

National Insurance (Class 1 employee)

Employee National Insurance contributions are calculated on earnings above the primary threshold of £12,570 per year. For 2026/27:

• 8% on earnings between £12,570 and £50,270
• 2% on earnings above £50,270

For the NLW worker, NI is 8% on £12,215, which is about £977 per year. Combined with Income Tax, total annual deductions are roughly £3,420, leaving a net annual take-home of about £21,365 (around £1,780 per month).

Pension contributions

If you contribute to a workplace pension, your take-home pay will be lower. Many schemes use a net pay arrangement where contributions are deducted from gross pay before tax, reducing your taxable income. For example, a 5% employee contribution would reduce gross pay for tax purposes by about £1,239, saving around £248 in Income Tax. Your actual take-home would then be lower, but you gain pension savings with tax relief.

Student loan repayments

If you have a student loan, repayments are deducted from your pay once you earn above a threshold. For Plan 5 (post-2023 undergraduate loans), the threshold is £25,000 per year, with 9% deducted on earnings above that. Since the NLW full-time salary is below £25,000, no student loan repayments would be due. For postgraduate loans, the threshold is £21,000 with 6% deductions, so a NLW worker earning £24,785 would repay 6% on £3,785, about £227 per year.

Scotland: different Income Tax bands

Workers in Scotland face different Income Tax rates. For 2026/27, the Scottish bands are:

• Starter rate (19%) up to £3,967
• Basic rate (20%) from £3,968 to £16,956
• Intermediate rate (21%) from £16,957 to £31,092
• Higher rate (42%) from £31,093 to £62,430
• Advanced rate (45%) from £62,431 to £125,140
• Top rate (48%) above £125,140

A full-time NLW worker in Scotland earning £24,785 would pay tax across the starter, basic, and intermediate bands. The total Income Tax would be slightly different from the rest of the UK, affecting take-home pay. Use our take-home calculator to compare scenarios.

How the minimum wage interacts with benefits

The impact of the minimum wage increase on household incomes depends on interactions with the tax and benefit system. For Universal Credit claimants, the Government also increased the standard allowance by 6.2% in 2026/27, which is higher than the NLW rise. This means NLW workers receiving UC may see a greater increase in take-home income than the headline 4.1% wage rise. Conversely, workers who only pay tax (without UC) may see a smaller increase because tax thresholds remain frozen, pushing more earnings into taxable bands.

Check your own take-home pay

Your actual take-home pay depends on your exact tax code, pension contributions, student loan status, and whether you live in Scotland. For a personalised estimate, use our salary articles and salary data to understand typical deductions, or try the take-home calculator on this site.

Summary

The minimum wage in the UK for 2026/27 is £12.71 per hour for workers aged 21 and over (National Living Wage), with lower rates for younger workers and apprentices. Gross annual pay for a full-time NLW worker is around £24,785, but after Income Tax and National Insurance, monthly take-home is roughly £1,780. Additional deductions for pension and student loans can reduce net pay further. Always check your payslip and official GOV.UK guidance for your specific situation.

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