26 March 2026
Each year, changes to the new National Minimum Wage (NMW) and Living Wage rates requires careful attention. While the new rates for 2026 come into effect from 1 April, the point at which they should be applied in payroll is not always straightforward.
The new rates should be applied based on the first full pay reference period that begins on or after 1 April, as per the National Minimum Wage regulations 2015, regulation 4(2):
"(2) The single hourly rate of the national minimum wage at which a worker is entitled to be remunerated as respects work, in a pay reference period, is the rate which applies to the worker on the first day of that period."
In practice, this means that some employees will not receive the updated rates until after the 1 April, as it depends on when the pay reference period begins, rather than the date the payment is made. A common area of confusion arises where a pay period spans both March and April.
For example, there is a monthly payroll with a pay reference period running from 21 March to 20 April 2026, with a pay date of the 25 April. Even though much of the pay period falls after the 1 April, along with the payment date, the previous National Minimum Wage rate would be applied to the entire period:
Saturday 21 March – Monday 20 April; the new NMW rates would not be payable
Tuesday 21 April – Wednesday 20 May; the new NMW rates would be payable.
It is also important to note that pay reference periods do not need to be split, the previous rate applies to the whole period.
Please note, employers can choose to update the new rates earlier if they wish, even where the pay reference period begins before the 1 April. In such cases, paying above the statutory minimum does not create any compliance issues, as long as all workers receive at least the applicable minimum hourly rate entitlement.
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