What if your pay bill goes up in April? The 2027 minimum wage for small employers
The minimum wage goes up to £13.21 an hour on 1 April 2027. What it costs a small UK employer, who to check first and what else the Budget changed.
In short
- From 1 April 2027 the minimum wage is £13.21 an hour at 21 and over, £11.27 at 18 to 20, and £8.31 for under-18s and apprentices.
- Someone on 30 hours a week at 21 or over costs about £17.70 a week more, or around £920 a year, once National Insurance and pension are added.
- The Government will limit non-compete clauses in employment contracts. Nothing changes yet, and the detail is due in early 2027.
- The Budget didn't raise employer's National Insurance rates or move any Employment Rights Act dates.
On this page 10 sections
- What is the minimum wage from April 2027?
- How much will the April 2027 rise cost an employer?
- Who should I check first?
- Do I have to give everyone a pay rise?
- What's happening to non-compete clauses?
- What are the mileage rates from April 2027?
- Anything else for small employers?
- What didn't change?
- Quick answers
- Want someone to check your pay before April?
The minimum wage goes up on 1 April 2027. The Budget on 28 October 2026 confirmed the new rates, and a few other parts of it land on anyone who employs people. Here they are, with what to do about each one.
The short answer: the minimum wage goes up 3.9% on 1 April 2027, to £13.21 an hour at 21 and over. That's the one to plan for now. The Government will also limit non-compete clauses in employment contracts, with the detail due in early 2027. The tax-free mileage rate stays at 55p a mile, and goes up above 10,000 miles. Employer's National Insurance rates haven't changed, and the Budget didn't move any Employment Rights Act dates.
The quick version:
- put the April 2027 rates in your budget now
- list everyone paid under the new rates, including people whose birthday moves them into a higher age band
- check salaried staff against the hours they really work
- decide whether supervisors' pay moves too
- don't add non-competes to new contracts for roles that don't need them
What is the minimum wage from April 2027?
The Government accepted the Low Pay Commission's recommendations in full. Every rate goes up by 3.9%. You may have seen £13.20 in early reports: the confirmed rate is £13.21.
| Who | Now (from 1 April 2026) | From 1 April 2027 |
|---|---|---|
| 21 and over (National Living Wage) | £12.71 | £13.21 |
| 18 to 20 | £10.85 | £11.27 |
| 16 and 17 | £8.00 | £8.31 |
| Apprentices under 19, or in their first year | £8.00 | £8.31 |
If you provide accommodation, the most you can count towards the minimum wage goes up to £11.53 a day. The Low Pay Commission's announcement has the full list, and the regulations that make it law are still to come.
The new rate starts with the first pay period that begins on or after 1 April 2027. So if your pay period runs from the 15th of one month to the 14th of the next, the new rate starts on 15 April.
How much will the April 2027 rise cost an employer?
Take someone aged 22 or over on 30 hours a week at the minimum wage. This is the same example as in our post on your first employee.
| A week | Now | From April 2027 |
|---|---|---|
| Wages (30 hours) | £381.30 | £396.30 |
| Employer's National Insurance | £42.80 | £45.05 |
| Pension, employer's share | £7.84 | £8.29 |
| Total | £431.94 | £449.64 |
That's £17.70 a week more, or about £920 a year, for one person. National Insurance is 15% of pay above £96 a week, and that threshold is fixed until April 2028. The pension is 3% of pay above £120 a week. The pension figures assume the thresholds stay as they are, which the Government confirms each year. If the Employment Allowance covers your National Insurance, the extra is mostly the wages: £15 a week, or £780 a year.
For a team of five on similar hours, it's around £4,600 a year. Worth knowing before you set prices for next year.
Who should I check first?
We often find the gaps in the same places:
- people just above the minimum now. £13 an hour is fine today and under the minimum from April
- birthdays. Someone who turns 21 moves straight onto the higher rate. So does an apprentice who turns 19 after their first year
- salaried staff. Divide their pay by all the hours they actually work, including training, travel between jobs and time before or after a shift. A salary that looked fine can fall under the minimum
- deductions. Uniforms, till shortages and accommodation charged above the offset can take pay below the minimum
- pay per visit or per job. Add the travel time and check the hourly rate that's left
Underpaying is expensive. You pay back the arrears, HMRC can add a penalty of up to 200% of them, and employers can be named. Records showing the hours behind each payslip are your best defence.
Do I have to give everyone a pay rise?
No. The law only says nobody can be paid less than the minimum for their age. But if your supervisor is on £13.25 now, they'll be 4p above the people they supervise from April. Whether you move their pay too is your choice. It's easier to decide now than when someone asks.
If you do change pay, write to the employee to confirm the new rate. Anything that's part of their written statement of terms needs confirming in writing within a month of the change.
What's happening to non-compete clauses?
The Government says it will pass a law so non-compete clauses in employment contracts stop getting in the way of hiring, across the whole economy. It will set out the detail in early 2027, and it will also consult on other restrictive practices.
Nothing has changed yet. A non-compete is still only enforceable if it protects a real business interest and goes no further than is reasonable, and many in small business contracts wouldn't pass that test anyway.
What to do now:
- don't add a non-compete to new contracts for roles that don't need one
- check what your contracts really rely on. For most small businesses, it's confidentiality and not poaching clients or staff
- wait for the detail before rewriting existing contracts
What are the mileage rates from April 2027?
If staff use their own car or van for work, the tax-free rate stays at 55p a mile for the first 10,000 business miles, and that's now permanent. Above 10,000 miles it goes up from 25p to 35p a mile from 6 April 2027.
If you pay less than these rates, your employee can claim tax relief on the difference. If you pay more, the extra is taxable. Update the rates in your expenses policy or handbook.
Anything else for small employers?
Two things that aren't HR, but help:
- taking on a young apprentice. In England, an employer that doesn't pay the apprenticeship levy can get a hiring payment of up to £2,000 for a new apprentice aged 16 to 24, paid through the training provider. For apprentices of that age, the Government also pays all the training costs, up to the funding limit for the course. GOV.UK has the conditions
- shops, cafés and pubs in England. From 1 April 2027, small business rate relief for retail, hospitality and leisure properties covers rateable values up to £18,000 in full (up from £12,000), tapering to £21,000. Pubs, social clubs and live music venues get extra relief on top
What didn't change?
- employer's National Insurance. No change to the rates, and the Employment Allowance still takes up to £10,500 a year off the bill
- the Employment Rights Act. The Budget didn't move any of its dates. The harassment duty starts on 30 October 2026 and unfair dismissal protection after six months starts on 1 January 2027. Our employment law changes page has every date, and it now includes the Budget too
- sick pay. The 2027/28 rate for Statutory Sick Pay hasn't been published yet. Our SSP calculator uses the 2026/27 rate until it is
Quick answers
Is the minimum wage going up in April 2027?
Yes. The Budget on 28 October 2026 confirmed a 3.9% rise for every rate from 1 April 2027. The National Living Wage for workers aged 21 and over goes up from £12.71 to £13.21 an hour.
When does the new minimum wage start?
From the first pay period that begins on or after 1 April 2027. If you pay monthly from the 1st, that's 1 April. If your pay period runs from the 15th, it's 15 April.
What is the minimum wage from April 2027?
£13.21 an hour at 21 and over, £11.27 at 18 to 20, and £8.31 for 16 and 17-year-olds and for apprentices who are under 19 or in their first year.
How much is £13.21 an hour a year?
About £24,042 a year on 35 hours a week (£462.35 a week), £25,760 on 37.5 hours (£495.38 a week) and £27,477 on 40 hours (£528.40 a week), before tax. That's the minimum for someone aged 21 or over from 1 April 2027.
Is it the same as the real Living Wage?
No. The National Living Wage of £13.21 is the legal minimum. The real Living Wage is voluntary and set by the Living Wage Foundation: £14.10 an hour, or £15.45 in London, announced on 15 October 2026. Accredited employers have until 1 May 2027 to pay it.
Does it apply in Scotland, Wales and Northern Ireland?
Yes. The minimum wage is the same across the UK. The business rates change in this post is for England only.
Has employer's National Insurance gone up?
No. The rate stays at 15% and the threshold at £5,000 a year (£96 a week). You pay more only because wages go up.
Are non-compete clauses banned now?
No. The Government has said it will legislate to limit them, with the detail due in early 2027. Until then, the current rules apply.
Want someone to check your pay before April?
An HR Health Check looks at your contracts, pay and records against the law as it is now and as it will be, then gives you the fixes in order. Or start with the free HR health check, which has a section on pay.
Send us your what-ifs.
This is general information for UK employers, not legal advice. If you're dealing with a specific situation, speak to an employment solicitor. Checked against the Budget 2026, GOV.UK and the Low Pay Commission on 29 October 2026.
