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To ensure you are paid legally, you can calculate your annual salary from the UK's National Minimum Wage (NMW) by dividing your yearly earnings by the total hours you work annually. As of 2024, the rate for workers aged 23 and over, known as the National Living Wage, is £11.44 per hour. For a standard full-time worker, this translates to a minimum annual salary of approximately £23,795.
The National Minimum Wage (NMW) is the lowest hourly pay rate permitted by law for most workers in the UK. Introduced by the National Minimum Wage Act of 1998, it is a key worker protection. It applies to an hourly rate but is used to ensure that even salaried workers receive the equivalent minimum pay for their time. A higher tier, the National Living Wage, applies to workers aged 23 and over. It is a criminal offence for an employer to not pay the NMW.
The NMW covers a wide range of workers, including:
However, certain groups are not covered, such as the self-employed, voluntary workers, company directors, and members of the armed forces.
The rates are updated each April. The following table outlines the rates effective from April 2024, as per UK government guidelines.
| Age or Apprentice Status | Minimum Hourly Rate (From April 2024) |
|---|---|
| Aged 23 and over (National Living Wage) | £11.44 |
| Aged 21 to 22 | £11.44 |
| Aged 18 to 20 | £8.60 |
| Under 18 | £6.40 |
| Apprentice (aged under 19 or in first year of apprenticeship) | £6.40 |
Source: UK Government
If you are on a yearly salary, you can verify you are earning at least the NMW by calculating your effective hourly rate. Based on our assessment experience, follow these steps:
Determine Your Total Annual Hours: A standard full-time contract is often 40 hours per week. Multiply your weekly hours by 52 (weeks in a year). For example, 40 hours/week x 52 weeks = 2,080 hours per year. For part-time work, use your actual contracted weekly hours.
Calculate Your Gross Hourly Rate: Divide your total annual salary before tax (your gross salary) by the total annual hours worked. For instance, if your annual salary is £24,000 and you work 2,080 hours: £24,000 ÷ 2,080 = £11.54 per hour. You would then compare this figure to the appropriate rate in the table above.
It is crucial to include all working time in your calculation. This includes time spent training, travelling between assignments (but not commuting from home), and being on standby at your workplace. It does not include paid holiday leave or unpaid sick leave.
Commission and Tips: UK law states that commission payments can count towards the NMW. If your commission earnings in a pay period are low, your employer must top up your pay to meet the minimum wage. However, tips and gratuities paid directly to you by customers do not count towards the NMW.
Addressing Underpayment: If your calculation shows you are being paid below the NMW, you should first raise the issue with your employer. If they do not resolve it, you can contact Acas (Advisory, Conciliation and Arbitration Service) for free advice or report the employer to HM Revenue & Customs (HMRC), who can investigate and enforce payment. Deductions for tax and National Insurance are legal and do not mean your employer is paying below the NMW, as the calculation is based on gross (pre-tax) pay.
To ensure you are paid fairly, always calculate your effective hourly wage from your annual salary and know your rights under the National Minimum Wage law. The key steps are: 1) Know the correct rate for your age, 2) Accurately calculate your total annual working hours, and 3) Divide your gross annual salary by those hours. Regularly check the government's website for rate updates, and seek advice from Acas if you believe you are being underpaid.
