National living and national minimum wage

From April 2017 the national living and national minimum wage became aligned.

The new rates are as follows:

Employees aged 25+                £7.50
Employees aged 21 – 24           £7.05
Employees aged 18 – 20           £5.60
Employees aged 16 – 17           £4.05
Apprenticeship rate                   £3.50

The apprenticeship rate applies to those aged under 19 or 19+ in their first year of apprenticeship.

Accommodation offset rate is £6.40/day or £44.80 per week.

Exclusions to the national minimum wage

The majority of workers age 16 and over qualify to receive the national minimum wage. Exclusions include au pairs, family members in the family business, voluntary workers and apprentices over 19 and in the first 12 months of employment or under the age of 19.

Calculating the minimum wage

Calculating whether an employee has been paid the national minimum wage can be very complicated. In essence, the employer should divide the amount of gross pay by the number of hours worked, but there are different rules relating to different types of work.


Employers must keep records to show they have paid their workers the national minimum wage for three years after the pay reference period that the records cover.

Penalties for non-compliance

Employers who fail to pay the minimum wage can face prosecution, risking a criminal record and a maximum fine of £20,000 per worker.

If you have any questions regarding paying your staff, including issues with tips please call our payroll team.