Employment rates and limits – Changes for April 2026

Employment rates and limits are updated every April to account for annual inflation, and the key increases are outlined below. In addition to this year’s updated figures, Employment Rights Act 2025 (ERA) changes took effect on 6 April 2026. To find out more about the ERA-related statutory rights reforms read our recent update, Employment Rights Act 2025 changes from 6 April 2026.

National Minimum Wage

From 1 April 2026, the National Minimum Wage rates (including the National Living Wage rate) increased as follows:

• the National Living Wage for workers aged 21 and over will increase from £12.21 to £12.71 per hour;
• for workers aged 18 to 20, from £10.00 to £10.85 per hour; and
• for workers aged 16 to 17, from £7.55 to £8.00 per hour.

For apprentices, the minimum hourly rate increased from £7.55 to £8.00 per hour. The apprentice rate, which is equal to the 16 to 17-year-old rate, continues to apply to apprentices under the age of 19, or apprentices who are 19 and over and in the first year of their apprenticeship.

The daily rate for the accommodation offset limit increased from £10.66 to £11.10. The accommodation offset limit is the maximum amount an employer can deduct from an employee’s pay for any accommodation provided by the employer.

Statutory sick pay

In addition to the ERA-related reforms to statutory sick pay (SSP) taking effect in April, the rates of SSP changed on 6 April. SSP is payable at the lower of 80% of average weekly earnings or the flat rate. The flat rate increased from £118.75 to £123.25.   

Generally, employers cannot recover SSP from HM Revenue & Customs.

Family-related leave

From 5 April 2026 (statutory maternity pay) and 6 April 2026 (paternity, adoption, shared parental, neonatal care and parental bereavement pay) increased from £187.18 to £194.32 per week. The earnings threshold (which remains relevant for family‑related statutory payments and National Insurance purposes) also increased from £125 to £129 per week. The earnings threshold for maternity allowance remains unchanged at £30 per week.

Employers can reclaim all or most of these statutory payments from HMRC.

Limits on employment tribunal awards

The statutory limit on several employment tribunal awards also increased. For events giving rise to compensation which occurred on or after 6 April 2026:

• the maximum amount of a week’s pay (used for calculating statutory redundancy pay and various awards including the unfair dismissal basic and compensatory awards) increased from £719 to £751; and
• the maximum compensatory award for an unfair dismissal claim (provided it falls below the additional cap of 52 weeks’ pay)  increased from £118,223 to £123,543.

Under the ERA, the compensatory cap for unfair dismissal claims will be removed entirely from 1 January 2027 and the qualifying period will be reduced from two years to six months. 

Vento bands for injury to feelings awards

The Vento bands, which serve as guidelines for employment tribunals in determining awards for injury to feelings in discrimination (and certain other) claims, are adjusted for claims made on or after 6 April 2026, as follows:

• lower band (for less serious cases): £1,300 to £12,600 (previously £1,200 to £12,100);
• middle band (for cases not meriting an award in the upper band): £12,600 to £37,700 (previously £12,100 to £36,400); and
• upper band (for the most serious cases): £37,700 to £62,900 (previously £36,400 to £60,700).

In exceptional cases an award may exceed £62,900.

What’s ahead?

The next key date for ERA-related reforms is October 2026. Employers will need to plan ahead before this date to meet their ERA compliance obligations. To find out more about the scope of changes, please refer to our Employment Rights Act tracker. 

If you would like to discuss the potential impact of any of these rates and limits changes on your business operations and employees, please get in touch with your usual contact in the CMS Employment team.

This article was co-authored by Olivia Seymour, a trainee solicitor in the employment team at CMS.