What's Minimum Wage UK? Your Take-Home Pay Guide for 2026/27

What's Minimum Wage UK? Understanding Your Take-Home Pay

If you're asking what's minimum wage UK for the current tax year, the answer depends on your age and whether you are an apprentice. For 2026/27, the National Living Wage (NLW) for workers aged 21 and over is £12.71 per hour. For 18–20 year olds it is £10.85 per hour, and for apprentices and those under 18 it is £8.00 per hour. These rates were set by the government from April 2025 and continue into the 2026/27 tax year.

But gross hourly rates are only part of the story. What really matters is how much lands in your bank account after deductions. This guide explains how your take-home pay is calculated from minimum wage earnings, covering income tax, National Insurance, and other common deductions.

Gross Salary at the National Living Wage

Working full-time at 37.5 hours per week for 52 weeks on the NLW gives a gross annual salary of approximately £24,785. That is your starting point before any deductions.

• Hourly rate: £12.71
• Weekly hours: 37.5
• Annual gross: 37.5 × 52 × £12.71 = £24,785

For younger workers on the 18–20 rate (£10.85/hour), the same hours give a gross of about £21,158. Apprentices on £8.00/hour earn around £15,600 annually.

How Deductions Work: Income Tax and National Insurance

Your employer deducts income tax and National Insurance (NI) through PAYE before paying you. The amount depends on your earnings relative to thresholds set by HMRC.

Income Tax

Everyone has a Personal Allowance of £12,570 – the amount you can earn tax-free. Earnings above that are taxed at the following rates for England, Wales and Northern Ireland:

• Basic rate: 20% on income from £12,571 to £50,270
• Higher rate: 40% on income from £50,271 to £125,140
• Additional rate: 45% on income over £125,140

For a full-time NLW earner at £24,785, the taxable income is £24,785 – £12,570 = £12,215. Income tax at 20% is £2,443 per year.

National Insurance

Employee NI is charged at 8% on earnings between £12,570 and £50,270, and 2% on earnings above that. For the NLW earner, NI is 8% on £12,215 = £977 per year.

Total deductions (tax + NI) = £2,443 + £977 = £3,420.

Take-home pay = £24,785 – £3,420 = £21,365 per year, or about £1,780 per month.

This gives an effective deduction rate of around 14%, much lower than for higher earners because a large chunk of your income is tax-free.

Other Deductions: Pension and Student Loan

If you contribute to a workplace pension (auto-enrolment), your take-home will be lower. A typical 5% employee contribution on qualifying earnings reduces your net pay further. For example, with a 5% pension contribution, annual take-home might fall to around £20,100.

If you have a student loan, repayments start once your income exceeds the threshold for your plan. For Plan 1 it is £26,900, for Plan 2 £29,385, for Plan 4 (Scotland) £33,795, for Plan 5 £25,000, and for postgraduate loans £21,000. At minimum wage levels, only those on Plan 5 or a postgraduate loan would likely see deductions.

Scotland: Different Income Tax Bands

If you live in Scotland, income tax rates are different. The Personal Allowance is still £12,570, but above that you pay:

• Starter rate: 19% on £12,571–£15,397
• Basic rate: 20% on £15,398–£27,491
• Intermediate rate: 21% on £27,492–£43,662
• Higher rate: 42% on £43,663–£75,000
• Advanced rate: 45% on £75,001–£125,140
• Top rate: 48% on over £125,140

For a full-time NLW earner in Scotland, the tax calculation is slightly different because the starter and basic rates apply to lower bands. The overall tax bill may be a bit higher than in England, but still modest at this income level.

Using a Take-Home Calculator

To get a precise figure for your own situation, use our take-home calculator. It applies the latest HMRC rates for 2026/27 and lets you add pension contributions, student loan plan, and your region (England/Wales/NI or Scotland). You can also explore more salary articles for detailed guides on tax bands, NI, and other deductions.

Summary

• What's minimum wage UK? £12.71/hour for ages 21+, £10.85 for 18–20, £8.00 for apprentices/under-18.
• Gross full-time NLW salary: ~£24,785 per year.
• Typical monthly take-home (tax and NI only): ~£1,780.
• Effective tax rate: Around 14%.
• Scotland: Different income tax bands apply, so net pay may differ slightly.

Remember, these figures are estimates. Your actual take-home pay depends on your tax code, pension contributions, student loan repayments, and any benefits in kind. Always check your payslip and refer to official GOV.UK guidance for your exact deductions.