Why you need to check you’re really getting the minimum wage

Earlier this week, the government named and shamed more than 500 employers who failed to pay staff the minimum wage. These companies - some of them well-known household names - left nearly 60,000 workers short-changed.

While it’s good news that action is being taken, it’s a timely reminder that underpayment is more common than you might think. And in many cases, workers aren’t even aware it’s happening to them.

At Money Wellness, we’re all about helping you feel in control of your money. And that starts with making sure you’re being paid what you’re legally entitled to.

Minimum wage: what you should be getting

From April 2025, the national minimum wage increased.

Here’s what you should be earning per hour:

• £12.21 if you’re aged 21 and over
• £10.00 if you’re aged 18–20
• £7.55 if you’re 16–17

Sounds straightforward, right? Unfortunately, it’s not always that simple.

How employers might be underpaying you

Even if your hourly rate looks correct on your payslip, there are several ways your actual earnings could fall below the legal minimum. Here are some common things to watch out for:

These don’t count towards minimum wage:

• Tips and gratuities – These are yours to keep, and they shouldn’t be used to top up your wage.
• Overtime or holiday pay premiums – These are bonuses, not a replacement for your base pay.
• Uniforms, tools or equipment – If you have to buy these yourself, the cost must not reduce your hourly rate below the minimum wage.
• Perks and benefits – Things like company cars or childcare vouchers in a salary sacrifice scheme aren’t part of your legal wage.
• Advances or loans – These don’t count toward your hourly pay.

And if you’re paid by commission, your employer must still make sure that your total earnings divided by hours worked meet or exceed the minimum wage.

The grey areas: Could you be missing out?

Sometimes underpayment happens in ways that are easy to overlook. You may be affected if:

• You travel between jobs (like client visits) but aren’t paid for that time.
• You’re asked to complete training without pay.
• You’re on call but only paid if called in.
• Your employer deducts money for accommodation they provide.

These situations can make a big difference to your actual take-home pay, especially if you’re working close to the minimum wage.

When below-minimum pay is legal

There are a few specific deductions that can legally reduce your take-home pay, even if it drops below the minimum wage. These include:

• tax and national insurance
• pension contributions
• trade union fees
• certain accommodation charges (within limits)
• repaying loans or wage overpayments

But apart from these, most deductions shouldn’t take you below your legal minimum wage.

What to do if you think you’re being underpaid

If something doesn’t feel right:

• Review your payslips and check your total pay against hours worked.
• Speak to your employer - underpayments are sometimes down to simple mistakes.
• If the issue isn’t resolved, you can report concerns directly to HMRC.