Preparing for the April 2027 pay round

The new minimum rates from 1 April 2027

The government accepted the Low Pay Commission's recommendations on 28 October 2026:

• 21 and over (the National Living Wage): £8.72 an hour, up from £12.71
• 18 to 20: £6.45, up from £10.85
• Under 18: £4.55, up from £8.00
• Apprentices under 19, or in the first year: £4.15, up from £8.00
• Accommodation offset: £8.20 a day, up from £11.10

That's a rise of about -31.4% at the top rate. A full-time worker on 37.5 hours a week at the National Living Wage earns about £17,004 a year.

New rates apply from the first pay period that starts on or after 1 April. For some pay cycles that period starts in March.

Look beyond the lowest paid

The minimum wage rise squeezes the gap above it. A team leader paid £13.30 an hour today is 59p above the minimum. After April, the same rate is only 458p above it.

Decide what gap you want between grades, then cost keeping it. Check:

• everyone within about 50p an hour of the new rates
• salaried staff, by the hours actually worked in each pay period
• salary sacrifice, which reduces pay for minimum wage purposes
• birthdays that move someone into a higher band during the year

Set the budget

Cost the whole award, not just the rise. Employer National Insurance is 15% above £5,000 a year, pension contributions rise with pay, and employers with a pay bill over £3,000,000 pay the apprenticeship levy.

Model more than one option: a flat percentage, a minimum cash increase, or awards by rating or position in range. The cheapest option on paper can break your grade structure.

Check it's fair before you sign it off

Compare awards for men and women doing equal work, and for part-time and full-time staff. Write down the reason for any difference.

If you have 250 or more employees, the April pay round feeds your gender pay gap figures. Private and voluntary sector employers take their snapshot on 5 April and must report by the following 4 April. Under the Employment Rights Act 2025, action plans on the gender pay gap and menopause are expected to become mandatory for these employers from spring 2027.

If you're changing other terms

Some employers fund a pay rise by changing allowances, shift premiums or hours. That needs agreement. From March 2027 the Employment Rights Act 2025 is expected to make dismissing someone for refusing a change to core terms automatically unfair in most cases, so plan for consent, not dismissal and re-engagement.

If you recognise a union for pay, build its negotiating timetable into the plan.

A timetable to April

1. November: pull one row per person from payroll and check it's clean.
2. December: model options, test differentials and set the budget.
3. January: run the minimum wage and equal pay checks. Get sign-off.
4. February: prepare a letter for each person and check a sample of every version.
5. March: issue letters and load the new rates into payroll before the first April pay period starts.
6. April: check the first payroll against the model, line by line.

Each person's new pay is a change to their written statement of terms. Confirm it in writing within one month of the change, and ideally before it applies.