From 1 April 2026 the statutory pay floor for a care worker aged 21 or over is £12.71 an hour under the National Living Wage. Lower floors apply to younger and apprentice workers. But the headline rate is not what a care employer actually pays per hour: employer National Insurance at 15% above the £5,000 secondary threshold, holiday accrual at 12.07% for irregular-hours staff, pension, and mileage for domiciliary providers all sit on top. This page sets out every figure a care operator needs to budget accurately for 2026-27.
The 2026-27 statutory pay floors
From 1 April 2026 the statutory minimum hourly pay rates are as follows. These are legal floors: paying below them exposes the employer to HMRC enforcement, back-pay liability and public naming.
| Worker category | Hourly floor from 1 April 2026 |
|---|---|
| Aged 21 and over (National Living Wage) | £12.71 |
| Aged 18 to 20 | £10.85 |
| Under 18 and apprentices (first year, or aged under 19) | £8.00 |
The apprentice rate applies to workers who are in the first year of their apprenticeship, or who are apprentices aged under 19 regardless of their year. Once an apprentice aged 19 or over completes their first year, they move to their age-appropriate rate. For most care teams the NLW of £12.71 is the operative floor: the vast majority of care workers are 21 or over.
Nothing prevents paying above the floor. Many providers pay above it to reduce turnover in a sector where vacancy rates run high. The floor is the statutory minimum, not the recommended rate.
Why the headline rate is not the cost
The NLW is a pay floor, not a budget figure. The real cost per hour worked is higher once the employer's statutory on-costs are added. Three items drive most of the gap.
Employer National Insurance
Employer NIC is 15% on earnings above the secondary threshold of £5,000 a year (£96 a week, £417 a month) from April 2025. The same threshold applies in 2026-27. For a full-time worker at the NLW floor, a meaningful proportion of their weekly pay sits above £96, generating NIC at 15% on that excess. For a large part-time workforce typical in care, modelling each worker's NIC individually is more accurate than applying a blanket percentage of total payroll: workers close to the threshold generate little NIC, those well above it generate proportionately more.
The Employment Allowance of up to £10,500 per tax year can significantly reduce or eliminate a small operator's employer NIC bill. A single-home operator or domiciliary agency whose total employer NIC liability falls below £10,500 pays no employer NIC at all after claiming the allowance. Larger groups and associated entities may not benefit fully, as the allowance is shared across the group. The Employment Allowance should be factored into cost modelling before concluding how much NIC will actually be paid.
Holiday pay
Workers without regular hours, bank workers, zero-hours staff and casual care workers accrue holiday based on hours already worked at 12.07% of pay in each pay period. This is the statutory 5.6-week entitlement expressed as a proportion of the working year. Errors here are a common Employment Tribunal category in the sector: failing to include average travel-time payments and irregular overtime in the holiday-pay reference period understates the entitlement. The 12.07% is a floor: longer-service workers or contractual enhancements may generate higher accrual.
An illustrative loaded-cost strip
The following is an illustration only, using the NLW floor for a worker on a pattern that takes their weekly pay above the NIC threshold. Actual figures depend on each worker's hours, pay and the employer's Employment Allowance position.
| Cost element | Rate / basis | Source |
|---|---|---|
| Basic pay floor (NLW) | £12.71 per hour | gov.uk/national-minimum-wage-rates |
| Employer NIC | 15% on earnings above £96/week | gov.uk employer rates |
| Holiday accrual (irregular hours) | 12.07% of pay per pay period | gov.uk/holiday-entitlement-rights |
| Pension (minimum employer contribution) | 3% on qualifying earnings | Pensions Regulator auto-enrolment rules |
Use our true cost per care hour calculator to model the loaded figure for your workforce mix.
Domiciliary specifics: travel time between calls
Travel time between client visits is the single most common source of NMW underpayment in the domiciliary sector. The rule is unambiguous: travel between one client's home and the next is working time for NMW purposes and must be paid at or above the applicable rate. A rota or invoicing model that pays only for face-to-face contact time and nothing for the journey between calls creates an unlawful shortfall even if the hourly rate on paper is above the NLW.
Two exceptions do not attract NMW. Travelling from home to the first call of the day is ordinary commuting and is excluded. So is the journey home from the last call.
Beyond the NMW floor, care providers who reimburse workers for fuel on inter-call journeys should use the AMAP rate of 55p per mile for the first 10,000 business miles from 6 April 2026 (up from 45p in prior years). Paying above AMAP creates a taxable benefit for the worker; paying below it allows the worker to claim a mileage allowance deduction. For staff who drive significant distances between calls, the 55p rate is a material cost line that should feed directly into fee modelling.
For a full treatment of the travel-time NMW rules and the sleep-in question together, see our post on sleep-in pay, travel time and NMW compliance.
Sleep-in shifts and the pay floor
After the Supreme Court's ruling in Royal Mencap Society v Tomlinson-Blake [2021] UKSC 8, only time a worker is actually awake and working counts for NMW on a sleep-in shift. The sleeping period, where sleeping facilities are provided and the worker is permitted to sleep, is excluded from the NMW calculation. This means a flat sleepover rate paid for a full shift without separating awake-for-work time from sleeping time does not automatically satisfy NMW; the calculation must reflect what actually happened during the shift.
The position changes if sleeping facilities are not provided or if the worker is required to remain active throughout. Check your shift structure carefully against the Mencap conditions. The sleep-in shift NMW compliance calculator helps you work through the awake-for-work hours for individual shifts. The sleep-in pay and travel-time blog covers the Mencap ruling in depth.
The whole-workforce view: rolling the floors into a staffing cost line
Individual rate compliance matters, but the more consequential planning question for a care home or domiciliary agency is what the statutory floors do to the total staffing cost line as a percentage of fee income. Wages typically account for the largest share of a care provider's operating costs. When the NLW rises each April, the cost line rises unless fee rates have already been modelled against the new floor.
Per-head modelling beats a blanket payroll percentage because care teams are mixed: different age bands carry different NMW floors, different hours patterns produce different NIC per-head exposures, and the Employment Allowance means a small operator's employer NIC position may be very different from a larger group's. Employer NIC at 15% above £5,000 per worker per year compounds quickly across a large part-time workforce even before holiday and pension are added.
Use the care staffing cost and margin calculator to build a whole-workforce view and stress-test the cost line against different occupancy or care-hours scenarios.
Keeping fees ahead of the floor
The statutory floors rise annually. A fee rate that covered the NLW floor in one year may produce a margin squeeze in the next if it has not been renegotiated to reflect the higher wage cost. This is particularly acute for providers who are substantially funded by local authorities, where fee uplifts are negotiated against the LA's own market sustainability assessments rather than automatically tracking the NLW.
The practical consequence is that wage-cost modelling must be built into fee negotiations and annual budget cycles, not treated as a fixed operating assumption. For providers receiving NHS-funded nursing care income, the FNC rates also shift annually. The interaction between the NLW floor, FNC income and LA fee levels is the core of care financial planning. For detail on how the funding mix works and how to account for it, see our post on FNC, CHC and local authority fee-mix accounting.
How we can help
Getting the pay floors right, calculating the true loaded cost per hour and ensuring fee models are built on current statutory rates is at the core of care payroll and financial planning. Our care payroll service handles the statutory calculations, employment allowance claims, holiday-pay accrual for irregular-hours staff and the mileage administration that domiciliary providers carry each pay period.