Budget 2026: what changes on your payslip
Short version: nothing changes before April 2027. From 1 April the minimum wage for over-21s goes to £13.21 an hour. Tax and National Insurance rates stay the same, but the point you start paying from stays frozen until 2031 — so a bigger slice of any pay rise gets taxed. Nothing was announced for CIS or umbrella workers.
What it means in money
Minimum wage: £12.71 → £13.21
From 1 April 2027, for anyone 21 or over. 18 to 20 goes to £11.27; 16 to 17 and apprentices go to £8.31. On a 40-hour week at the top rate that's £20 more before deductions.
Frozen thresholds
You start paying NI at £242 a week and tax at £12,570 a year, same as now, until 2031. Of that £20, about £6 goes in tax and NI, so around £14 reaches your pocket.
Nothing new for CIS or umbrella
The rules that apply to your deductions today still apply. The agency liability for umbrella PAYE that started in April 2026 stands.
Questions people ask
Does my pay go up now?
No. The new minimum wage starts on 1 April 2027. If you're paid at or near the minimum, check your first payslip after that date.
Why do I pay more tax if the rates didn't change?
Because the point at which tax and NI start is frozen. When your pay rises and the threshold doesn't, more of your pay sits above it. That's what "fiscal drag" means.
Anything for self-employed or CIS?
Nothing in this Budget changed CIS rates (20% registered, 30% not, 0% gross status) or the Class 4 National Insurance you pay on profits. The trading allowance rises to £3,000 from April 2027, which helps if you have small side income.
What should I check on my next payslip?
Your hourly rate against £12.71 now and £13.21 from April; employee NI at 8% between £242 and £967 a week; and that holiday pay is being paid, not held. Photo your payslip and we'll check all three.
This is a check against published rules, not legal or tax advice. If you're in a dispute, ACAS, a union or an adviser can act for you.