UK minimum wage rise 2026: What employers need to know

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The UK government has announced a 4.1% increase in the National Minimum and Living Wage, effective April 2026. The rate for over‑21s will rise to £12.71 per hour, with corresponding increases for younger workers and apprentices.

For many businesses, this change will require updates to contracts, payroll systems, and overall employment practices. Preparing now can help ensure compliance, reduce risk, and support smooth operations.

Reviewing Employment Contracts and Pay Structures

Employers should review all employment contracts to ensure they reflect the new minimum wage rates. This applies not only to existing staff but also to upcoming hires. Contracts should clearly outline pay, working hours, and any additional benefits.

Updating contracts in advance ensures compliance with employment law and communicates professionalism and fairness to employees. Failure to comply can expose businesses to penalties and reputational risk.

Payroll Adjustments and Planning

The increase may affect your business budget and payroll processes, particularly if you employ multiple staff on or near minimum wage rates. Planning ahead allows you to:

• Adjust payroll systems to reflect new rates.
• Communicate changes to employees clearly.
• Forecast the financial impact on staffing costs.

Compliance and Best Practices

Ensuring compliance with minimum wage legislation is not optional. Employers should:

• Confirm all staff are paid at or above the new rates from April 2026.
• Keep accurate payroll records to demonstrate compliance.
• Provide training for HR or payroll teams on the new requirements.

Taking proactive steps demonstrates good governance and protects your business from potential fines or disputes.

Why Acting Early Matters

Early preparation helps businesses maintain employee morale, avoid last-minute compliance issues, and stay ahead of legislative changes. It also signals to employees that your organisation is committed to fair and transparent employment practices.

Need Support?

If you’d like guidance on reviewing contracts, adjusting payroll, or ensuring compliance with the new minimum wage, our employment law specialists at Bowcock & Pursaill are here to help.

Email info@bowcockpursaill.co.uk, call 01782 200000 or complete our short contact form to discuss your business’s requirements.