Written and reviewed by James Whitfield · Updated for 2026/27 · Editorial standards · Methodology
The National Living Wage and National Minimum Wage rates in 2026/27, and what each rate means for actual monthly and annual take-home pay after income tax and National Insurance.
Typical default take-home figures for fast context before reading.
From April 2025, the National Living Wage (for workers aged 21 and over) is £12.21 per hour. For 18–20 year olds, the rate is £10.00 per hour. Apprentice and 16–17 rates are lower. Full-time work at 37.5 hours per week means the NLW generates approximately £23,810 per year in gross earnings.
These rates represent a significant increase over prior years. Since the NLW introduction and subsequent increases, the rate has risen faster than general wage inflation, meaning minimum wage earners have seen their gross pay increase proportionally more than typical employees.
Gross salary is only the starting point. Net take-home after income tax and National Insurance is what reaches a worker's bank account. For minimum wage earners, the effective tax rate is lower than higher earners because a larger proportion of income falls within the personal allowance.
At the 2026/27 NLW of £12.21/hour and full-time hours (37.5 per week), annual gross is approximately £23,810. After income tax on earnings above £12,570 and National Insurance contributions, annual take-home pay is around £19,600–£19,900, depending on whether student loans, pension or other deductions apply.
Monthly take-home at NLW rates is approximately £1,630–£1,660. This represents an effective deduction rate of around 17–18% on gross earnings, substantially lower than a higher earner because the personal allowance absorbs a significant portion of the gross.
Workers whose total hours and hourly rate keep annual gross below £12,570, part-time workers or younger apprentices, may pay no income tax at all. National Insurance still applies above the primary threshold, but on smaller amounts.
Use these current tax-year figures as context while reading this article.
| Band | Gross salary range | Rate |
|---|---|---|
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
| Band | Gross salary range | Rate |
|---|---|---|
| Starter rate | £12,571 to £16,537 | 19% |
| Basic rate | £16,538 to £29,526 | 20% |
| Intermediate rate | £29,527 to £43,662 | 21% |
| Higher rate | £43,663 to £75,000 | 42% |
| Advanced rate | £75,001 to £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
| Plan | Threshold | Rate |
|---|---|---|
| PLAN1 | £26,900 | 9% |
| PLAN2 | £29,385 | 9% |
| PLAN4 | £33,795 | 9% |
| PLAN5 | £25,000 | 9% |
| Postgraduate | £21,000 | 6% |
Yes. The examples align to current 2026/27 assumptions used by the calculator, including PAYE income tax and UK NI treatment.
Differences usually come from tax-code changes, bonus timing, benefits, multiple employments or period-level payroll adjustments.
No. Compare both monthly and annual net pay because loan plan, pension and tax-region settings can materially change outcomes.
Yes. Correct student loan plan and pension percentage are two of the biggest drivers of realistic net-pay estimates.
No. This content is informational and planning-focused, not personal financial advice.
Use official HMRC and UK government guidance for tax, NI, student loan and Scottish income tax rules.