Free tool

Minimum wage compliance checker

Not a rate lookup. This works out the effective hourly rate the way HMRC does, once unpaid working time, uniform deductions and the accommodation offset are counted, then prices the arrears and the penalty if it falls short. Rates from April 2026, with earlier years for checking a pay run you have already done.

Who and when

Tax year

Pick an earlier year to check a pay packet you have already run.

Age or status band

Rates step up on the birthday, from the next pay reference period.

The pay packet

Pay period

Hours paid for

hrs

Gross pay

Before tax, and before any deductions below.

Unpaid working time

This is where most underpayment hides. Opening up, cashing up, waiting for a bag search, handover, travelling between sites: all of it is working time, and all of it counts.

Unpaid minutes a shift

min

Shifts in the period

Other unpaid hours

hrs

Travel between sites, training, unpaid trial shifts.

Deductions and accommodationuniform, tools, live-in staff

Deductions or payments in connection with the job

Uniform, tools, required training, a till-shortage deduction. Tax, National Insurance and pension do not count.

The worker is provided with accommodationAnything charged above £11.10 a day reduces minimum-wage pay. Accommodation given free adds the offset to it.

The effective rate

April 2026 to March 2027 · 21+

Actually paid

£12.45/hr

£12.4506 exactly, from 40.8333 hours and £508.40 of pay

Must be at least

£12.71/hr

21 and over (National Living Wage)

Short by

£10.59

Every weekly period, £550.68 a year

Gross pay for the period: £508.40
Pay counting towards the minimum wage: £508.40
Hours paid for: 40 hrs
Plus unpaid working time10 min × 5 shifts: 0.8333 hrs
Hours counting for the minimum wage: 40.8333 hrs
Effective hourly rate: £12.4506

Underpaying by £0.2594 an hour

This person needs £518.99 for the 40.8333 hours that count, and is getting £508.40. That is £10.59 short every pay period, or £550.68 a year.

0.83 hours of unpaid working time were added to the 40 paid hours. Time spent opening up, cashing up, waiting for a security check or travelling between sites is working time and counts for the minimum wage.

What it would cost to put right

If this arrangement has been running

Workers on the same arrangement

Pay periods it has run for

Underpaid at the time: £2,202.72
Restated at current rates, as HMRC requiresArrears are recalculated at today’s minimum wage, so an old shortfall costs more than it did: £2,202.72
Penalty at 200% of arrearsHalved to £2,202.72 if everything is paid within 14 days. Capped at £20,000.00 a worker: £4,405.44
Total exposure: £6,608.16

Arrears above £500.00 put a business in scope for the public naming round the Department for Business and Trade publishes. HMRC can go back 6 years.

Get warned before a rate breaches the minimum wage

Free on one site, up to 5 staff.

Indicative guide based on the National Minimum Wage Act 1998, the National Minimum Wage Regulations 2015 and HMRC's National Minimum Wage Manual. Rates are those published on GOV.UK and are reviewed every April. Salaried-hours workers, output work and unmeasured work have their own rules that this tool simplifies. Not legal advice: take advice before relying on an arrears figure.

Do it once here, or never again

The check is easy. Remembering to run it is the hard part

Underpayment is almost never a decision. It is a birthday nobody noticed, ten minutes of cashing up nobody logged, or an April uprating that missed one person on one site.

A warning before the rate is saved

Set a pay rate that would breach the minimum wage for that person and WagePilot says so at the point you set it, not six months later.

Birthdays you have to remember

Ages roll forward on their own. When someone crosses into a new band, the rate is flagged before the next pay reference period starts.

Real clock times, not rounded ones

Every minute worked is captured at the door, so unpaid opening-up and cashing-up time never appears in the first place.

April upratings applied for you

When the rates change each April, the checks change with them. Nothing to look up, nothing to retype across a team.

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The rules

Why careful employers still underpay

Almost none of the employers named by the government set out to pay under the minimum wage. They failed a test they did not know they were taking.

The test is a fraction, not a rate

The minimum wage is not "did you agree an hourly rate above the floor". It is pay that counts, divided by time that counts, across a pay reference period of no more than a month. Both halves of that fraction move in ways a payroll rate never shows.

What lands on the time side

Working time is much wider than the rostered shift. Opening up before the doors, cashing up after they close, waiting for a mandatory bag search, handing over to the next shift, travelling between two sites in the same day, attending required training: all of it counts. Almost none of it appears on a timesheet, and all of it dilutes the rate.

Ten unpaid minutes a shift, five shifts a week, is about 43 hours a year. On a 40-hour week at £12.71 an hour that alone is enough to push a compliant-looking rate under the line.

What comes off the pay side

Deductions and payments in connection with the employment reduce minimum wage pay: a uniform the worker has to buy, tools required for the job, training they must pay for, a deposit for equipment. Tax, National Insurance, pension contributions and voluntary deductions for the worker's own benefit do not. The distinction is about who the spending is really for.

Accommodation is the one benefit that counts

Accommodation has its own arithmetic, and it runs in both directions. Charge above the daily offset of £11.10 and the excess reduces minimum wage pay. Provide it free, or below the offset, and the difference can be added to minimum wage pay. No other benefit in kind counts: not meals, not travel, not a staff discount.

What it costs when it goes wrong

HMRC calculates arrears at today's rate rather than the rate that applied at the time, so an underpayment from 2024 is restated upwards before it is repaid. On top sits a penalty of 200% of the underpayment, halved if everything is settled within 14 days, capped at £20,000 a worker. Once total arrears reach £500, the business is in scope for the public naming rounds. HMRC can look back 6 years.

That is why the arrears panel multiplies by workers and pay periods. A rota practice applied to one person is a small correction. The same practice applied to twelve people for two years is a different conversation, and it is the one that ends up in a press release.

Common traps

What employers get wrong

None of these are careless. Every one of them is a reasonable assumption that happens to be untrue.

Checking the headline hourly rate and calling it done.

The test is total pay divided by total working time across the pay reference period. Ten unpaid minutes a shift is enough to fail it on a rate that looks fine.
Deducting the cost of a uniform from wages.

Deductions in connection with the job reduce minimum wage pay. If that takes someone under the line it is an underpayment, however reasonable the charge looked.
Treating a trial shift as unpaid.

A short, observed trial can sit outside the rules. A shift where someone works unsupervised, on your rota, doing your work, is working time and has to be paid.
Rounding clock-outs back to the quarter hour.

Rounding that only ever runs one way removes paid time systematically. Round to the nearest step, or in the worker’s favour.
Assuming a birthday updates the rate automatically.

The new band applies from the start of the next pay reference period, and nothing in payroll tells you it has happened.
Thinking arrears are just the money that was not paid.

HMRC restates arrears at today’s rate and adds a penalty of 200%, with public naming above £500 of arrears.

Minimum wage questions

What are the National Minimum Wage rates from April 2026?

From 1 April 2026 the National Living Wage for workers aged 21 and over is £12.71 an hour. The 18 to 20 rate is £10.85, and the rate for under-18s and apprentices is £8.00. The accommodation offset is £11.10 a day, or £77.70 a week.

Why is my effective rate lower than the rate I pay?

Because the minimum wage is tested on total pay divided by total working time across the pay reference period, not on the headline rate. Unpaid minutes spent opening up, cashing up or waiting for a security check are working time, and deductions for uniform or tools come off the pay side. Both push the effective rate down.

Which deductions reduce minimum wage pay?

Anything deducted, or paid by the worker, in connection with the job: uniform, tools, required training, a deposit for equipment. Tax, National Insurance, pension contributions and deductions for the worker’s own benefit, such as a savings scheme, do not reduce it.

How does the accommodation offset work?

It cuts both ways. Charge more than the daily offset and everything above it reduces minimum wage pay. Provide accommodation free, or below the offset, and the difference can be counted towards minimum wage pay. It is the only benefit in kind that counts at all: not meals, not travel, not a staff discount.

Are tips counted towards the minimum wage?

No. Tips, gratuities and service charges cannot count towards minimum wage pay, so basic pay has to clear the rate before a single tip is added. Since the Employment (Allocation of Tips) Act 2023, qualifying tips must also be passed on to staff fairly and in full.

How does HMRC calculate arrears?

At today’s rate, not the rate at the time. The formula is the amount underpaid divided by the rate then, multiplied by the rate now, so an old shortfall costs more to put right than it ever saved. HMRC can go back six years.

What is the penalty for underpaying the minimum wage?

A penalty of 200% of the arrears, halved to 100% if the arrears and penalty are paid within 14 days, capped at £20,000 per worker with a minimum of £100 per notice of underpayment. Total arrears of £500 or more also put an employer in scope for the public naming rounds the Department for Business and Trade publishes.

When does someone move up a wage band?

From the start of the next pay reference period after their birthday, not on the birthday itself. An apprentice moves to the rate for their age the day the first year of the apprenticeship ends. Both are common sources of accidental underpayment, because nothing in a payroll system announces them.

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