Written and reviewed by James Whitfield · Updated for 2026/27 · Editorial standards · Methodology
The National Living Wage for workers aged 21 and over is £12.21/hour from April 2026. For 37.5 hours/week that is approximately £23,810/year. Monthly take-home and full PAYE deduction breakdown.
The National Living Wage from April 2026 is £12.21/hour for workers aged 21 and over. At 37.5 hours/week that is approximately £23,810/year, with monthly take-home of around £1,722 after income tax and NI.
The National Living Wage (NLW) applies to workers aged 21 and over. From April 2026, the rate is £12.21 per hour. The National Minimum Wage for 18–20 year olds is £10.00 per hour. For 16–17 year olds and apprentices, the rate is £7.55 per hour. These are statutory minimum rates, many employers, particularly in sectors with skills shortages, pay above these rates.
For a worker on the NLW working 37.5 hours per week, annual gross earnings are approximately £23,810 (£12.21 x 37.5 x 52). For a 40-hour week, annual gross is approximately £25,396. These are common salary reference points in retail, social care, hospitality and logistics sectors.
The Living Wage Foundation publishes a separate 'Real Living Wage' which is a voluntary rate calculated to cover basic living costs. For 2026, the Real Living Wage was £12.60 in the UK and £13.85 in London. This is not the same as the government-mandated National Living Wage, employers who pay the Real Living Wage do so voluntarily and can accredit with the Living Wage Foundation.
On an annual salary of £23,810 (37.5hrs/week at NLW), the 2026/27 PAYE deductions in England are: income tax of approximately £2,248 (20% on £23,810 minus £12,570 = £11,240 taxable), NI of approximately £898 (8% on £11,240 above the NI threshold). Total deductions: £3,146. Monthly net pay: approximately £1,722.
For a 40-hour week at NLW (£25,396/year), taxable income is £12,826. Income tax: approximately £2,565. NI: approximately £1,026. Total deductions: £3,591. Monthly net pay: approximately £1,817. The Plan 2 student loan threshold (£27,295) is above NLW annual earnings at both 37.5 and 40 hours, so no student loan deductions apply at these earnings levels.
Auto-enrolment applies to workers aged 22–67 earning above the lower threshold of £10,000/year. NLW workers typically qualify and will have pension contributions deducted automatically. A 5% employee pension contribution on £23,810 reduces take-home by approximately £99/month (the exact reduction depends on whether the scheme uses salary sacrifice or relief at source).
Employers who pay below the statutory minimum wage face significant legal and reputational risk. HMRC enforces the NLW and NMW through named publication of non-compliant employers and can impose penalties of 200% of underpayment, up to £20,000 per worker. Workers underpaid can claim arrears going back several years.
Common compliance errors include: not accounting for time spent on activities required by the employer (travel between work sites, mandatory training), making deductions from wages that pull effective hourly pay below the minimum (uniforms, tools), using salary sacrifice arrangements that reduce pensionable pay below the NLW rate, and failing to uprate pay when the NLW increases in April each year.
For payroll teams and small employers, the April increase date each year requires timely payroll updates. Workers who turn 21 during the year should be moved from the 18–20 rate to the NLW rate from the pay reference period that follows their 21st birthday, not the next April.
Current tax-year thresholds used across this guide and calculator.
£12.21 per hour from April 2026 for workers aged 21 and over. At 37.5 hours per week this gives annual gross earnings of approximately £23,810. At 40 hours per week, the annual equivalent is approximately £25,396.
At £23,810/year (37.5hrs/week), monthly take-home after income tax and NI is approximately £1,722. No Plan 2 student loan applies at this level (threshold is £27,295). Auto-enrolment pension would further reduce take-home if applicable, a 5% contribution reduces net by approximately £99/month.
Yes. Workers aged 18–20 are covered by the National Minimum Wage of £10.00/hour. Workers aged 16–17 and apprentices receive £7.55/hour. The NLW of £12.21 applies from age 21.
Yes. Use the scenario links in this guide to open prefilled states, then adjust salary, region, loan and pension settings.
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Tax region, tax code, student loan plan, pension contribution and salary sacrifice are the key assumptions to check first.