Know much about the UK minimum wage? Find out more about the living wage, salary laws, and what you’re entitled to.
Understanding the national minimum wage and average salaries is an important part of finding work in the UK. Firstly, all employees over the school leaving age are entitled to UK national minimum wage. However, rather confusingly for many new arrivals, once most UK workers reach 23 years they are then eligible for the National Living Wage.
But what does this mean for you? And how will does this play out for you and your family if you’re moving to the UK? Read on to find out everything you need to know about the minimum wage in the UK, including the living wage, average salaries, and more. Sections include:
- Minimum wage in the UK
- Minimum wage in the UK: Exclusions and variations in the UK
- What to do if you’re not being paid the minimum wage in the UK
- Average salary in the UK
- Gender pay gap in the UK
- Salaries and wages for expats in the UK
- What to do if your salary is too low in the UK
- Useful resources
Minimum wage in the UK
Under the then-Labour government, the UK introduced its first official minimum wage in 1999. It was a move to tackle issues of low pay across the nation and help stimulate economic growth. The initial rate was £3.60 an hour for those over 22 years which, at the time, equated to a substantial increase in wage for many.
The minimum wage is reviewed annually and calculated on a wage per hour. The Government takes advice from an independent body called the Low Pay Commission and subsequently sets the minimum wage. The reviewed UK minimum wage comes into effect at the start of April, in line with the new financial year.
What is the difference between UK minimum wage and UK living wage?
The differences between the UK’s National Minimum Wage and National Living Wage can be confusing for many new arrivals. Furthermore, there is also the Living Wage, which is also different. To help break it down for you:
- The National Minimum Wage is the mandatory pay for those in employment between the ages of 16 and 23, increasing with each age bracket. This is compulsory and set by the UK government.
- The National Living Wage is the highest rate of minimum wage and must be paid to all employees over 23 years. This is compulsory and set by the UK government.
- The UK Living Wage is set by the Living Wage Foundation as the suggested ‘real’ living wage in line with the actual cost of living. There are two suggestions from the foundation; one wage for London and one for the rest of the UK. This is not compulsory.
How much is minimum wage?
The minimum wage is determined by the age bracket you fall into. As of 1st April 2022, these figures are:
- £4.81 (under 18 and apprenticeships)
- £6.83 (18–20 year olds)
- £9.18 (21–22 year olds)
- £9.50 (23+ year olds – also known as National Living Wage)
Accommodation provided by your employer can be taken into account when calculating the minimum wage. Any other benefit provided by the company, however, such as food, transport, childcare vouchers does not count towards your minimum wage in the UK. Tips, service charges, or cover charges directly from customers also do not influence minimum wage entitlement or the amount you receive.
Compared to other countries, the minimum/national living wage in the UK ranked as the 7th highest minimum wage in the world in 2020. Australia, Luxembourg, and New Zealand ranked top of the list. The average hourly earnings for full-time workers in the UK was £15.59 in 2021 while the minimum wage for those 23 and over (National Living Wage) was £8.91.
Minimum wage in the UK: exclusions and variations
As an expat in the UK, you are typically entitled to the wages explained above. Furthermore, you are also able to enjoy the same workers’ rights as a UK citizen in terms of paid annual leave and sick pay. For more information on this and more, read our guide to labor law in the UK.
Minimum wage entitlement includes workers who are:
- Casual laborers (e.g., someone hired for one day)
- Agency workers
- Workers and homeworkers paid by the number of items they make
- Trainees or workers on probation
- Disabled workers
- Agricultural workers
- Foreign workers
- Offshore workers
Exclusions to minimum wage in the UK
Be aware that minimum wage legislation in the UK does not cover all groups and positions. Indeed, people working within the following roles or industries are not entitled to receive minimum wage:
- Self-employed people running their own business
- Company directors
- People who are volunteers or voluntary workers
- Workers on a government employment program, such as the Work Program
- Members of the armed forces
- Family members of the employer living in the employer’s home
- Non-family members living in the employer’s home who share in the work and leisure activities and don’t pay for meals or accommodation (e.g., au pairs)
- Workers younger than school leaving age (usually 16)
- Higher and further education students on work experience or a work placement up to one year
- People shadowing others at work
- workers on government pre-apprenticeships schemes
- People on the following European Union (EU) programs: Leonardo da Vinci, Erasmus+, Comenius
- People working on a Jobcentre Plus Work trial for up to six weeks
- Share fishermen
- People living and working in a religious community
Interns and apprentices in the UK
Internships, sometimes known as work experience or work placements, sometimes require the payment of minimum wage. Whether or not an intern is officially employed with an organization will determine their entitlement to minimum wage. An intern can be classed as a worker, volunteer, or employee. Volunteers are not entitled to minimum wage, however, workers or employees are. If you’re planning an internship, check with the company ahead of time to see what, if any, financial compensation you’ll receive.
Apprentices aged under 19, or who are in the first year of an apprenticeship, are entitled to an apprentice rate of pay. Following your first year of an apprenticeship, and providing you are 19 or over, you should receive the minimum or national living wage in line with your age group.
The apprentice rate was set at £4.30 per hour in 2021 and is due to rise to £4.81 per hour in April 2022.
Variations by sector or region in the UK
There are no variations on minimum or national living wage across sectors in the UK. London’s minimum wage is set at the national rate, despite the cost of living being significantly higher than the cost of living elsewhere in the UK. The Living Wage Foundation, however, calculates a London Living Wage annually, which is in line with the costs of living in the city. This is not enforced by law and employers can choose if they wish to pay the London Living Wage.
As of 2022, the Living Wage Foundation claims the real living wage should be set at £11.05 per hour in London and £9.90 per hour across the rest of the UK, as opposed to the National Living Wage set by Government at £9.50 per hour across the UK.
This movement towards a real living wage in line with living costs has been popular in the UK, with almost 9,000 employers paying the voluntary ‘Living Wage’. If you’re unsure, you can ask your employer which minimum wage standard applies to your workplace.
Minimum wage calculator in the UK
If you’re paid on a weekly or monthly salary, you should work out your equivalent hourly rate to check you’re being paid at least the minimum wage. You can use the UK government’s minimum wage calculator to check you are being paid at least minimum wage.
What to do if you’re not being paid the minimum wage in the UK
Most companies abide by the UK’s labor laws and follow minimum wage legislation. However, there are still those who attempt to pay less. The government named and shamed 208 businesses in December 2021 for failing to pay their workers minimum wage.
It is against the law to not follow these regulations. The government’s employment and tax department (HMRC) can fine businesses that violate this. Employers can also be taken to court on your behalf. £20,000 is the maximum fine for non-payment per worker and should employers fail to pay this, they can be banned from being a company director for 15 years.
If you find you are earning below the correct minimum wage, the first thing to do is check your work contract and speak with your employer. If this doesn’t work, you should request payment records in writing from your company. Workers can make a complaint with HMRC on behalf of themselves or someone else, which can be anonymous. The Advisory, Conciliation, and Arbitration Service (ACAS) can also provide guidance and support through their confidential helpline.
Citizens Advice also provides guidance for workers who find they are not being paid correctly.
Average salary in the UK
The average (median) annual salary in the UK in 2021 was around £31,461 per year, which equates to £585.5 per week. There is a relatively high cost of living in the UK compared to other countries. Furthermore, the cost of living in London is higher than in other parts of the nation, although you can expect higher prices in many of the country’s cities.
Annually full-time workers across the UK are legally entitled to 28 days (5.6 weeks) paid leave. Employers can choose to include bank holidays in this entitlement. There are typically eight public holidays in England, Wales, and Scotland every year, and 10 in Northern Ireland.
Your employer deducts National Insurance and income tax from your salary each pay cycle. They will also pay Statutory Sick Pay for up to 28 days if you’re too ill to work. However, be aware that you will need to provide a doctor’s note for longer absences.
Depending on your situation, you may also be eligible for maternity or paternity leave and state pension. Companies in the UK are also required to provide a workplace pension scheme, which should be explained to you upon starting at a new company. However, you are able to opt out of this should you prefer.
If you’re self-employed you will need to arrange your own National Insurance and tax payments, and you will not have the same employment benefits, such as sick leave.
Your payslip should clearly include your name and sometimes your address, as well as your tax code, the tax period, your National Insurance number, payments, expenses, and deductions including pensions and student loans.
Average salary in the UK by sector
Salaries can vary significantly across industries and professions in the UK. The finance and insurance sector, followed by energy, mining, and information and communication are the highest paying industries.
The top three job titles with the highest annual salaries in the UK are:
- Chief executives: £81,102
- Marketing and sales directors: £69,779
- Legal professionals: £69,514
The bottom three job titles with the lowest annual salaries in the UK are:
- Playworkers: £14,345
- Beauticians and related occupations: £15,210
- Hairdressers and related services: £15,357
Average salary in the UK by job level
A quick summary of average monthly salaries for different job levels, according to Paylab:
- Administration: £1,305–£3,001
- Economy, finance, accountancy: £1,241–£4,805
- General labor: £1,361–£2,478
- Tourism, gastronomy, hotel business: £1,208–£2,687
- Banking: £1,410–£5,345
- Marketing, advertising, public relations: £1,421–£4,592
When looking for employment in the UK your level of education can help secure a higher salary. Find out if your academic qualifications are recognized in the UK.
Average salary in the UK by region
Generally speaking, you are more likely to earn more in larger cities, with salaries in London and the surrounding areas the highest in the UK. However, while you may be paid more in London (the average salary here is £39,716), it is good to note the cost of living is also higher.
Salary checker in the UK
You can use a salary checker to see what your profession will likely pay in the UK. Here are a couple of online platforms to help you:
Gender pay gap in the UK
As a consequence of Brexit, the UK is no longer listed on the Gender Equality Index. However, for reference, in 2020 it ranked sixth-best in the EU. The UK sits at number 23 on the Global Gender Gap Index for 2021, which is a 2 place decline from 2020. While the gender pay gap has been slowly declining over time, there remains a pay gap between men and women in the UK. Men working full-time earned on average £33,414 annually in the 2020/2021 financial year, while women earned £28,305.
When compared to Wales, Scotland, and Northern Ireland, England has the largest gender pay gap.
In 2021 in the UK’s mining and energy industry, men working as production managers or directors earned an average of £15,226 extra a year than women in the same job. Research carried out by the Office of National Statistics showed only 44 roles where women receive more than their male counterparts. These included welfare professionals, sports coaches, public relations professionals, and therapy professionals.
Thankfully, the UK is taking steps to address the gap in pay. In Scotland, the organization Close The Gap works towards this, and across the UK all employers in the private and voluntary sector with 250 or more employees must publish their gender pay gap data annually. The government also sets out guidelines for organizations to follow which include ‘effective’ and ‘promising’ action suggestions.
Salaries and wages for expats in the UK
Workers born outside the UK make up 18% of the workforce. In 2020, this included 2.44 million people born in the EU and 3.37 million people born outside the EU. However, due to the COVID-19 pandemic and issues surrounding Brexit, there was a large movement of people leaving the UK. Overall it remains unclear how the pandemic affected migration numbers and employment due to impacts on the data collection at the time.
Unemployment rates for non-UK nationals have broadly followed a similar rise and fall to the UK-born population. However, in line with the economic downturn during the pandemic, the unemployment rate increased more sharply for migrants and immigrants than for UK citizens.
Prior to Brexit, Poland was one of the top countries of origin for immigrants to the UK. In 2020, there were approximately 815,000 people from Poland living in the UK. The second largest group is Romanians (approximately 404,000), followed by India (361,000). The main sectors where expats find jobs are the hospitality, transport and storage and information, communication, and IT sectors.
What to do if your salary is too low in the UK
The law in the UK protects you against discrimination in the workplace, including in relation to pay and benefits. It is best to speak with your employer first if you think your pay is incorrect, or are experiencing discrimination. If this does not help the situation, you can speak with ACAS, Citizens Advice, or your Trade Union representative if you are a member. Check to see if your sector has a trade union. It might be worth joining for support in matters such as unfair wages.