2. Why the increase matters for the national minimum wage 2025-26

The step-up in the national minimum wage 2025-26 reflects several key factors:

• The independent Low Pay Commission recommended the new rates after assessing cost of living, productivity and labour market conditions.

• For workers aged 21 + the increase to £12.21 represents a 6.7 % rise.

• For younger age bands the increases were significantly higher: 18-20 age band rose by 16.3 %, and 16-17 band by 18 %.

• For employers, compliance is critical: paying below the required “national minimum wage 2025-26” can lead to enforcement action and penalties. Employers must average out pay across a pay reference period.

3. Key changes and thresholds for the national minimum wage 2025-26

With the national minimum wage 2025-26, here are some of the important updates you should be aware of:

• From 1 April 2025 the age threshold for the NLW remains 21 and over.

• The accommodation offset (the amount by which the minimum wage can be reduced when accommodation is provided) increases to £10.66 per day.

• The new rates apply to the first pay reference period starting on or after 1 April 2025 — employers must check whether their pay periods straddle the date and update accordingly.

• Underpayments must be corrected and interest may apply; also the government may impose penalties for non-compliance.
  As an employer, ensuring you are paying at least the correct national minimum wage 2025-26 rate is essential.

4. Responsibilities for employers under national minimum wage 2025-26

To ensure compliance with the national minimum wage 2025-26, employers should take the following steps:

• Review all current staff and their pay rates to check they meet or exceed the minimum for their age band as of 1 April 2025.

• Check whether any accommodation offset applies and ensure that offset is correctly calculated (i.e., £10.66 per day for eligible accommodation).

• Review pay periods: if a pay reference period includes 1 April 2025, ensure the new rate is paid from the start of the first pay period that includes or begins after that date.

• Ensure apprenticeship payments comply — apprentices under 19 (or first year older apprentices) must receive at least £7.55 per hour from April 2025.

• Keep records: accurate hours worked, pay reference period start and end dates, pay rates used.

• Monitor any changes in the workforce (e.g., age changes, new starters, apprentices) and update payroll accordingly.
  By doing this you align your business with the new national minimum wage 2025-26 requirements.

5. What happens if you don’t comply with the national minimum wage 2025-26?

Failing to meet the national minimum wage 2025-26 requirements can result in:

• A requirement to pay back arrears to workers who were under-paid.

• Interest on under-payments.

• Civil penalties of up to £20,000 per worker for persistent non-compliance.

• Reputational damage and possibly inspection or investigation by the HM Revenue & Customs (HMRC) or other regulators.
  Given the stronger increases for April 2025, audits of minimum wage compliance are likely to increase — so paying proper attention to the national minimum wage 2025-26 is prudent.

6. Practical steps for small businesses in Essex & East London

If you operate in Essex, East London or the surrounding region and employ staff, here are practical tips you should follow to embed the national minimum wage 2025-26 in your payroll processes:

• Update payroll software to ensure the correct rates (£12.21/£10.00/£7.55) take effect from the correct pay period.

• Notify line managers and HR teams about the rate change and the need to review any roles paid close to the previous minimum.

• Consider the impact of the increased wage on labour cost budgets, profit margins, recruitment, and retention.

• Ensure that contracts and job adverts for roles reference rates that are at least the new minimum and are compliant with the national minimum wage 2025-26.

• For employers who provide staff accommodation, review the offset calculation, ensure it is still valid and document its use.

• Consider offering training or guidance to supervisors managing younger workers or apprentices so that pay-checks reflect the correct national minimum wage 2025-26 age band.
  These steps help ensure you’re compliant and mitigate risk from the new minimum wage regime.

7. How Trueman Brown can help you with national minimum wage 2025-26

At Trueman Brown, we act as your advisory partner on payroll, employment compliance and accounting matters – including ensuring you are fully aligned with national minimum wage 2025-26 requirements.

Whether you’re a small business in Romford, Brentwood, or East London, we provide tailored support:

• Payroll review & software implementation: We can help review your payroll setup, check age-bands, pay reference periods, accommodation offsets and ensure the correct rates for the national minimum wage 2025-26 are reflected.

• Compliance risk assessment: We’ll identify roles at risk of under-payment, flag gaps and set up controls to avoid non-compliance with the national minimum wage 2025-26.

• Budgeting & forecasting: The rise to £12.21 for 21+ and the large increases for younger workers mean higher labour costs — we’ll help you forecast and plan accordingly.

• Employer guidance & training: We’ll provide guidance to your management team, ensuring you understand who is covered, how overtime/bonuses are treated, and how to maintain proper records under the national minimum wage 2025-26 framework.
  If you’d like to speak to us about how you can update your payroll and employer compliance for the national minimum wage 2025-26, please contact Mark at mark@truemanbrown.co.uk or by phone on 01708 397262. Let’s ensure your business is ready and compliant.

8. Frequently Asked Questions (FAQ)

Q1: What rates apply under the national minimum wage 2025-26?
A: From 1 April 2025 the rates are: £12.21 per hour for workers aged 21 and over; £10.00 per hour for 18-20 year olds; £7.55 for 16-17 year olds; and £7.55 for apprentices in the first year or under 19.

Q2: When do the new national minimum wage 2025-26 rates need to be paid?
A: The new rates apply to any pay reference period which begins on or after 1 April 2025. If your pay period spans that date, the new rate must apply from the start of the first pay period beginning on/after 1 April.

Q3: Does the national minimum wage 2025-26 include overtime, bonuses or tips?
A: No. Only the basic hourly rate (and certain non-optional allowances) count when calculating compliance with the national minimum wage 2025-26. Premium pay for overtime, bonuses or tips generally does not count.

Q4: What about apprentices? Do they get the national minimum wage 2025-26?
A: Yes. Apprentices under 19 or those aged 19+ in their first year of the apprenticeship must be paid at least £7.55 per hour from April 2025. If they are aged 19+ and beyond the first year, they are entitled to the age-based rate (e.g., £12.21 if 21+).

Q5: What is the accommodation offset under national minimum wage 2025-26?
A: If you provide accommodation to a worker, you may reduce the hourly rate by the accommodation offset, which from 1 April 2025 is £10.66 per day.

Q6: What are the penalties for failing to comply with the national minimum wage 2025-26?
A: You may be required to pay arrears to workers, interest, and civil penalties of up to £20,000 per worker. Consistent non-compliance could lead to enforcement by HMRC.

Q7: How can my business prepare now for national minimum wage 2025-26?
A: Review your payroll software and processes, check age bands and job adverts, ensure the correct rates apply for all staff, update staff contracts/communications, maintain accurate records of hours and pay reference periods, and engage payroll/accounting advisors (like us at Trueman Brown) to carry out a compliance check.

If you’d like to discuss how the national minimum wage 2025-26 affects your business and how to prepare effectively, do get in touch.