What Does the Minimum Wage Pay in April 2027?

Key takeaways

• The National Living Wage rises to £13.21 an hour on 1 April 2027, a 50p increase of 3.9 per cent on the £12.71 rate that applies from April 2026.
• At 37.5 hours a week that's £25,759.50 gross and £22,066.44 after income tax and National Insurance, a take-home rise of £702 on 2026/27.
• Every hour-week from 20 to 40 keeps the same 72p of each extra pound, because the Personal Allowance and the National Insurance primary threshold both stay at £12,570.
• From April 2027, 51.2 per cent of a 37.5-hour National Living Wage salary sits above the Personal Allowance, against 43.7 per cent in April 2024.
• The Low Pay Commission estimated in October 2026 that £13.44 would reach its two thirds of median earnings reference point, so £13.21 lands 23p below it.

The minimum wage in April 2027 is £13.21 an hour

The National Living Wage, which covers everyone aged 21 and over, goes to £13.21 an hour on 1 April 2027. That's a rise of 50p, or 3.9 per cent, on the £12.71 rate that runs from April 2026. The government confirmed the minimum wage rates for April 2027 at the Autumn Budget on 28 October 2026, accepting the Low Pay Commission's recommendations in full.

The other National Minimum Wage rates from April 2027 move by the same 3.9 per cent. The 18 to 20 rate goes to £11.27. The 16 to 17 rate and the apprentice rate both go to £8.31. The Accommodation Offset, the daily amount an employer can deduct from wages for accommodation, goes to £11.53 a day.

£13.21 is the headline figure for the UK minimum wage in 2027, and it's a gross one. It isn't what reaches a bank account. At 37.5 hours a week the annual gross is £25,759.50. After income tax and employee National Insurance the take-home is £22,066.44, which is £702 more than the same hours would have paid in 2026/27. The 50p is worth £975 of gross pay at that hour-week and £702 of spendable pay. The difference is £273, and the reason it's that size is the subject of this piece.

These are confirmed rates, not forecasts. The Commission submitted its advice on 23 October 2026 and the government published the accepted rates five days later. The tax and National Insurance figures behind the take-home column are confirmed too: the Budget 2026 rates tables set the Personal Allowance for the 2027 to 2028 tax year at £12,570 and the basic rate at 20 per cent, and they hold the National Insurance primary threshold at £242 a week.

Annual gross and take-home pay at 20, 30, 37.5 and 40 hours

The table runs the confirmed minimum wage in April 2027 against the rate that applies from April 2026, at four common hour-weeks. It assumes 52 paid weeks, the National Living Wage throughout, England, Wales or Northern Ireland, National Insurance category A, no pension contribution, no student loan and no other income. Each of those assumptions is examined further down, because changing any of them changes the last column.

At 37.5 hours the extra £702 is £58.50 a month. At 40 hours it's £748.80 a year. Income tax and National Insurance together take £3,693.06 from the 37.5-hour salary in 2027/28, which is 14.3 per cent of gross pay.

Every one of those four hour-weeks keeps exactly 72p of each extra pound

Look down the change column and the ratio is identical at every row. £520 of gross becomes £374.40. £975 becomes £702. £1,040 becomes £748.80. In each case the worker keeps 72 per cent, because all four hour-weeks sit in the same band.

Two thresholds do the work. The Personal Allowance, the slice of income that carries no income tax, is £12,570 in 2027/28. The National Insurance primary threshold, the point at which employee contributions start, is £242 a week, which HMRC publishes as £12,570 a year. They're the same number, and they've been deliberately aligned since 2022. Above that line the basic rate of income tax is 20 per cent and the employee National Insurance rate is 8 per cent, so each extra pound of gross pay loses 28p.

That holds even at 20 hours a week. £13.21 for 20 hours over 52 weeks is £13,738.40, which is already above £12,570. At £13.21 an hour, 18.3 hours a week reaches the Personal Allowance. At £12.71 it took 19.0 hours, and at the £11.44 rate of April 2024 it took 21.1 hours. The hours threshold at which a minimum wage job starts paying income tax has fallen by nearly three hours a week in three years, and no tax rate changed to produce that.

Over half a full-time National Living Wage salary now sits above the Personal Allowance

The clearest way to see what the freeze does is to track the share of a full-time minimum wage salary that's taxable. At 37.5 hours a week, the April 2024 rate of £11.44 produced £22,308 of gross pay, of which £9,738 was above the allowance: 43.7 per cent. April 2025's £12.21 took it to 47.2 per cent. April 2026's £12.71 took it to 49.3 per cent. The National Living Wage in April 2027, at £13.21, takes it to 51.2 per cent. That's the first time more than half of a full-time minimum wage salary falls inside the tax net.

The chart below plots those four figures. Nothing in it is a tax rise. The allowance has been £12,570 since 2021/22, Finance Act 2023 fixed it there up to and including the 2027 to 2028 tax year, and Budget 2025 legislated to hold it and the £37,700 basic rate limit at the same levels to 5 April 2031. The rate rose 15.5 per cent across those three years and the allowance didn't move, so the taxable share rose mechanically. That mechanism is the income tax threshold freeze, and the minimum wage is where it bites hardest in percentage terms, because the allowance is such a large share of the salary to begin with.

The 18 to 20 rate rises by the same percentage, so the gap in pounds widens

The 18 to 20 rate goes from £10.85 to £11.27, a 42p rise. Because both rates rose 3.9 per cent, the ratio between them is unchanged at about 85 per cent, but the gap in cash terms widens from £1.86 an hour to £1.94.

At 37.5 hours a week, an 18 to 20 year old grosses £21,976.50 in 2027/28 and takes home £19,342.68. A 21 year old doing identical hours takes home £22,066.44. The difference in spendable pay is £2,723.76 a year. The 18 to 20 worker's own take-home rise is £589.68, and the same 72p rule applies.

The Commission has been closing that gap for several years and has stopped for now. Its evidence report records the 18 to 20 rate at 72 per cent of the National Living Wage in April 2022, reaching 85 per cent by April 2026, with the wage floor for that age group up 59 per cent in nominal terms over four years. It describes the step as pausing on alignment rather than abandoning it, on the grounds that demand for young workers has slowed.

The rise costs an employer £1,121.25 and reaches the worker as £702

The 28p is only part of the wedge. Employer National Insurance runs at 15 per cent on earnings above the secondary threshold, which is £5,000 a year, and the Budget 2026 tables confirm both the rate and the threshold for 2027 to 2028. Every pound of the pay rise therefore costs the employer £1.15.

At 37.5 hours a week the £975 of extra gross pay carries £146.25 of extra employer National Insurance, so the full cost of the increase is £1,121.25. The worker's take-home goes up by £702. That's 62.6 per cent of what the increase costs. The remaining £419.25 splits into £273 of employee tax and National Insurance and £146.25 of employer contributions.

This is the arithmetic behind the employer evidence the Commission published alongside the rates. The Federation of Small Businesses, UK Hospitality and the British Chambers of Commerce all pointed to the combination of wage floors and employer National Insurance rather than the wage floor on its own. A CIPD survey of 2,017 employers found the recent rise in employer National Insurance bills cited as the cost with the biggest impact more often than any other cost, including among employers who said the National Living Wage significantly affected their wage bill. Salary sacrifice is the main route by which employers and employees reduce that combined bill, and the mechanics of the National Insurance saving from salary sacrifice work the same way at these incomes as at higher ones, though the sums are smaller.

A student loan or a workplace pension moves the number in the table

Two common deductions sit outside the table, and both matter more in 2027/28 than they did a year earlier.

The first is a student loan. The Plan 5 threshold published by GOV.UK at 28 October 2026 is £25,000 a year, with 9 per cent due on income above it. At 37.5 hours a week the 2026/27 gross of £24,784.50 was below that line and the 2027/28 gross of £25,759.50 is above it, so a Plan 5 borrower starts repaying for the first time: £68.36 in the year. At 40 hours the repayment goes from £129.31 to £222.91, and the take-home rise falls from £748.80 to £655.20. Above £25,000 a Plan 5 borrower's marginal deduction is 37 per cent, not 28. A frozen repayment threshold does to a borrower what a frozen allowance does to a taxpayer, and the arithmetic of freezing the Plan 2 student loan threshold is the same shape.

The second is automatic enrolment. In most schemes contributions are calculated on earnings between £6,240 and £50,270, with the employee paying 5 per cent and the employer 3 per cent under the minimum rates that have applied since April 2019. At 37.5 hours the employee share is £975.98 in 2027/28 against £927.23 in 2026/27. Under a net pay arrangement, where the contribution comes out of gross pay before income tax, take-home at 37.5 hours is £21,285.66 and the rise is £663 rather than £702. Whether the relief arrives that way or through a relief at source scheme changes the payslip but not the amount of relief for a basic rate taxpayer.

The Commission's own reference point said £13.44, not £13.21

The strongest objection to reading 3.9 per cent as a good year is that the Commission itself aimed higher. Its remit, published in March 2026, uses two thirds of median hourly earnings as the key reference point for the National Living Wage. In spring the Commission estimated £13.18, a 3.7 per cent rise, within a range of £13.02 to £13.34, as the rate that would reach it.

By October that estimate had moved to £13.44, a 5.7 per cent rise. The reason was pay elsewhere in the economy. Forecasters raised their expectations for 2026 wage growth from 3.1 to 3.7 per cent between March and October, and for 2027 from 3.0 to 3.3 per cent. A reference point defined as a ratio to the median moves when the median moves, so the target rose faster than the recommendation. The 23p gap is worth £448.50 of gross pay a year at 37.5 hours.

The Commission's defence is that the recommendation protects the rate against prices rather than against median pay. It judged £13.21 to be above a range of inflation forecasts covering April 2027 to March 2028, including the Bank of England's adverse scenario for a prolonged energy cost shock. Both claims can hold at once, because they're measured against different yardsticks. Against prices the rate holds its value. Against typical pay the Commission's own reading is narrower than either side's: 3.9 per cent "will not reach the two thirds of median earnings reference point" but "still makes progress towards it", and the Commission expects the ratio of the rate to median earnings to rise again in 2027.

The Commission also published what workers told it. A poll of Usdaw members found 41 per cent had struggled to pay everyday bills and had resorted to borrowing, while 4 per cent said they were comfortably managing repayments. Employer bodies asked for increases no faster than CPI inflation, which the Commission records as a first, and worker representatives pressed for ambitious ones. The recommendation that emerged was agreed unanimously. As Baroness Philippa Stroud, the Commission's chair, put it, the task was to find an increase that's fair to workers and leaves employers able to grow.

Where this arithmetic breaks

These figures carry a limitation the table itself can't show. They describe a payslip built from a flat hourly rate and steady hours, and the Commission's evidence report records that workers continue to tell it the availability and volatility of hours exacerbates their financial struggles. An hourly floor fixes the rate, not the roster.

The 52-week assumption is the biggest simplification. The minimum wage is a floor per hour worked in a pay reference period, not a salary, so real annual pay depends on rostered hours, unpaid breaks, holiday pay calculation and any accommodation deduction.

The weekly and annual thresholds don't line up exactly either. The primary threshold is £242 a week, and £242 across 52 weeks is £12,584, which is £14 above the £12,570 annual figure HMRC publishes. A weekly-paid worker's National Insurance is assessed week by week, so the figures here are close rather than exact for anyone not paid monthly on a flat salary.

Scotland is different. In 2026/27 a Scottish starter rate of 19 per cent applies to the first £3,967 above the allowance, so a Scottish worker at these incomes pays slightly less income tax than the table shows. The Budget 2026 rates tables carry no Scottish income tax table, because, in HMRC's words, "the Scottish Parliament sets Income Tax rates and limits for Scottish taxpayers". National Insurance is UK-wide, so only the tax column would change.

A household on Universal Credit is a different calculation again, because an award is withdrawn as earnings rise, and the 72p figure describes a payslip rather than a household's disposable income. The same applies to anyone whose childcare costs or council tax support move with earned income.

One more limit is worth stating plainly. The income tax figures rest on statute, because the Personal Allowance is fixed by Finance Act 2023 up to and including 2027 to 2028. The National Insurance figures rest on an announcement. HMRC's own policy paper notes that thresholds for future years are legislated through the annual setting of National Insurance rates, limits and thresholds, so the £242 in the Budget table becomes law when those regulations are made.

What would change the conclusion

The 72p is the load-bearing number here, and it rests on two thresholds that are set by different instruments. One is in an Act and runs to 2031. The other is in a Budget table and in regulations that haven't been made yet. A decision to lift the National Insurance primary threshold without touching the Personal Allowance would break the alignment that makes 20 per cent plus 8 per cent a single 28 per cent step, and every row in the table would need redoing. Nothing in the Budget 2026 rates tables points that way, since they hold the primary threshold at £242 in both years, which is precisely why the regulations are the thing to read rather than the rate announcement.

The second is the reference point. It moved from £13.18 to £13.44 in seven months on wage data alone, with no change to the Commission's method. If median earnings growth comes in below the 3.3 per cent now forecast for 2027, the gap to two thirds of the median closes without the rate having to rise any faster. If it comes in above, the April 2028 recommendation starts from further behind than this one did. The series to watch is the one the Commission says it relies on, the Annual Survey of Hours and Earnings and Average Weekly Earnings, rather than the rate itself. And the figure that would most change the take-home column is not a wage figure at all: it's whatever the September UK inflation print turns out to be, because that's what the frozen allowance is being measured against.