Difference between the National Minimum Wage and the National Living Wage in the UK

• Published date: 25 June 2023
• Subject Matter: Employment and HR, Employee Rights/ Labour Relations
• Law Firm: LegalVision
• Author: Ms Comfort Nkang

As an employer, you must understand the National Minimum Wage and the National Living Wage. It is a legal requirement to pay these where your employee or workers qualify for them. Not doing so results in substantial penalties such as a fine or criminal conviction. However, the National Minimum Wage and the National Living Wage are two different terms. Notably, one will apply to some of your workers and employees, and the other will apply to others. Therefore, you must understand any difference between the two. This article will explain the difference between the National Minimum Wage and the National Living Wage.

What is the National Minimum Wage?

As an employer, you are under a legal obligation to pay your workers the average minimum wage per hour. Importantly, the size of your business is irrelevant. Where your employee is of school-leaving age and under 23 years old or classed as an apprentice, you must pay them the National Minimum Wage.

School leaving age is the last Friday in June of the year a worker turns 16 years old, before the end of the year's school summer holiday.

The National Minimum Wage applies to all workers and employees regardless of working hours. It also applies, for example, to workers and employees training on the job, on probation, working from home and agency workers.

Notably, there are circumstances where the National Minimum Wage does not apply. For example, it does not apply to:

• those who choose to be self-employed;
• those who choose to work as volunteers;
• company directors;
• members of the armed services;
• those carrying out work experience as part of a course;
• people who are work shadowing; and
• those who have not reached school leaving age.

The Current Rate

The National Minimum Wage varies slightly according to the age of the person working for you. This table shows you the current rates of the National Minimum Wage according to the worker's age, which applies from 1 April 2022 to 31 March 2023.

Wage band	Current rate
Apprentice	'4.81
Aged 16 to 17 years old	'4.81
Aged 18 to 20 years old	'6.83
Aged 21 to 22 years old	'9.18

The Government reviews the National Minimum Wage rate every year, with changes taking place in April each year. The Low Pay Commission is the independent body that completes the review.

Additionally, the apprentice rate only applies to apprentices under the age of 19 or those over 19 but currently in their first year of the apprenticeship. A person aged 19 years or over who has finished the first year of...