From April 2026, National Living Wage and National Minimum Wage rates will increase across the UK. Hospitality businesses must ensure they apply the new rates correctly or risk HMRC penalties, financial exposure, and reputational damage.

Alfie Knapman shares how a proactive review of your pay structure can help ensure your business remains compliant.

From April 2026, the National Living/Minimum Wage rates are as follows:

• The rate for workers aged 21 and over will increase from £12.21 to £12.71

• The rate for 18-20 years olds will increase from £10.00 to £10.85

• The rate for 16-17 years olds will increase from £7.55 to £8.00

• The apprentice rate (for apprentices aged under 19 or in their first year of apprenticeship) will increase from £7.55 to £8.00

One of the most significant trends for 2026 is the rapid narrowing of the gap between age bands. The 18-20 bracket has seen an 8.5% increase, outweighing the 4.1% rise for those over 21.

Key considerations for hospitality businesses

Tronc arrangements

For businesses operating tronc schemes, it is important to note that tronc payments do not count towards National Living/ Minimum Wage obligations. Employers must ensure that base pay alone meets minimum wage requirements.

Deductions and work-related costs

If workers are required to purchase specific items, such as uniforms or equipment, any deductions from pay or payments made to the employer must be taken into account when assessing the National Living/ Minimum Wage compliance.

Even small deductions can reduce pay below the required threshold, creating a compliance risk.

The true cost of non-compliance

The financial risk of getting it wrong is greater than ever. If HMRC identify underpayments, businesses are required to pay the arrears at the current 2026 rates, rather than the rate at the time of the error.

A common mistake hospitality HR teams make is failing to track wage increases, particularly when a worker has a birthday mid-pay period.

From April 2026, enforcement activity will move to the Fair Work Agency, which will bring together existing enforcement bodies and increase scrutiny across sectors such as hospitality. You can read more in our insight: The Fair Work Agency: what hospitality businesses need to know.

Failure to correctly meet and operate the new rates isn't an option. If identified by HMRC, or the Fair Work Agency, your organisation could be issued severe penalties and be named and shamed. This applies to businesses with arrears of more than £500 in National Living/Minimum Wage payments to their workforce.

How can we help?

We provide hospitality businesses with assurance by offering National Living/Minimum Wage audits. Our reviews will confirm the impact the proposed increases will have on your business, outline any concerns we may have, and advise you on the options available to ensure you meet the demands made by HMRC.

As part of our services, we’ll analyse your existing processes and provide a detailed report highlighting whether your tronc arrangement correctly provides an exemption to National Insurance Contributions.

If you would like to review your current arrangements or prepare for the changes, get in touch with our Troncmaster Services team.