Introduction

If you're searching for what is minimum wage 2025, you're not alone. Every April, the UK government updates the National Living Wage (NLW) and National Minimum Wage (NMW) rates, and with them come a host of questions about how hourly pay translates into annual salary, what overtime rules apply, and whether you're being paid correctly. This article cuts through the noise, using the latest official data from the Office for National Statistics (ONS) and GOV.UK to give you the facts.

The Real Figures: What is Minimum Wage 2025?

National Living Wage and National Minimum Wage rates

From 1 April 2025, the main rates are:

• National Living Wage (21 and over): £12.21 per hour (up 6.7% from £11.44)
• 18-20 Year Old Rate: £10.00 per hour (up 16.3% from £8.60)
• 16-17 Year Old Rate: £7.55 per hour (up 18.0% from £6.40)
• Apprentice Rate: £7.55 per hour (for apprentices under 19 or in the first year of their apprenticeship)

These rates are set by the Low Pay Commission and implemented by the government. The NLW now applies to workers aged 21 and over, down from 23 in 2024. There is also an accommodation offset of £10.66 per day if your employer provides free housing.

How hourly rates convert to annual salary

A common question is: "If I earn £12.21 an hour, what's that per year?" The standard conversion assumes a contracted week of 37.5 hours (common in many sectors) and 52 paid weeks. So:

£12.21 × 37.5 hours/week × 52 weeks = £23,809.50 gross per year.

But not everyone works 37.5 hours. If you work 40 hours a week, the same hourly rate gives £25,396.80. Always check your contract for your exact weekly hours. For a quick calculation, use our hourly calculator.

For context, the ONS Annual Survey of Hours and Earnings (ASHE) for April 2025 reports that median full-time hourly pay (excluding overtime) is £19.67, and median full-time gross annual earnings are £39,039. So the NLW is well below the median, but it's the legal floor.

Common Myths About Hourly Pay and Overtime

Myth 1: Overtime is always paid at time-and-a-half

Many people believe that any work beyond 40 hours a week must be paid at 1.5 times the normal rate. In reality, UK law does not mandate a premium for overtime. The only requirement is that your average hourly pay across the pay period does not fall below the minimum wage. If your contract says "overtime is paid at basic rate", that's perfectly legal. Some employers offer enhanced rates, but it's not a right. Always read your employment contract or speak to your HR department.

Myth 2: Minimum wage applies to everyone equally

Another common misunderstanding is that the same minimum wage applies to all workers. As the rates above show, age matters. A 19-year-old can legally be paid £10.00 per hour while a 22-year-old doing the same job must get at least £12.21. Apprentices have their own lower rate. Also, some workers are excluded entirely, such as those who are self-employed or volunteers. The ONS Low and High Pay bulletin notes that around 447,000 jobs were paid below the NMW/NLW in April 2025, but this is an estimate and not a measure of non-compliance because eligibility can be complex.

Myth 3: Annual salary is simply hourly rate times 40 hours a week

Many job adverts quote an annual salary, but the conversion isn't always straightforward. If you're paid by the hour, your annual income depends on your actual hours worked, including any unpaid breaks. The standard formula (hourly × hours per week × 52) works for a steady schedule, but if you work irregular shifts, have unpaid overtime, or receive bonuses, your actual earnings will differ. The ONS ASHE annual figures capture pay for employees who have been in their job for a year or more and include pay affected by absence, so they are not directly comparable to a simple hourly calculation.

Myth 4: London weighting is guaranteed

Some assume that if you work in London, you automatically get a higher minimum wage or a London weighting allowance. In fact, the statutory NLW and NMW are the same across the UK. The Living Wage Foundation recommends a higher "real living wage" (£12.60 outside London, £13.85 in London in 2025), but this is voluntary. Your employer is not obliged to pay it unless your contract says so. Always check your contract and any collective agreements.

Why Understanding Your Contract Matters

Your employment contract is the key document. It should state your hourly rate or annual salary, your contracted hours, overtime policy, and any allowances like London weighting. If you're unsure, ask your employer or consult salary articles on our site for guidance. Remember that the minimum wage is just the floor; many sectors, such as NHS and teaching, have their own pay scales that are higher.

For a deeper dive into UK earnings benchmarks, visit our salary data page. And if you need to convert your own hourly rate, try our Hourly to Salary tool.

FAQs

What is the minimum wage for 18-20 year olds in 2025? From 1 April 2025, the National Minimum Wage for workers aged 18 to 20 is £10.00 per hour. This is a significant increase of 16.3% from the previous rate of £8.60. At 37.5 hours per week, that works out to roughly £19,500 gross per year.

Does overtime have to be paid at a higher rate? No, there is no legal requirement for employers to pay overtime at a premium rate such as time-and-a-half. The law only requires that your average hourly pay across the pay reference period does not fall below the National Minimum Wage or National Living Wage. Many employers choose to offer higher rates, but it is not guaranteed unless stated in your contract.

How do I convert my hourly rate to an annual salary? A common rule of thumb is to multiply your hourly rate by your contracted weekly hours and then by 52 weeks. For example, if you earn £12.21 per hour and work 37.5 hours a week, your gross annual salary would be £12.21 × 37.5 × 52 = £23,809.50. This assumes no unpaid overtime, bonuses, or salary sacrifice. Use our Hourly to Salary calculator for a quick estimate.