How to Report Wage Underpayment to HMRC (2026 Guide)

If you’re paid less than the legal minimum wage in 2026, you can report it confidentially to HMRC using the online Pay and Work Rights Complaints form. You don’t need to tell your employer first, and HMRC can recover unpaid wages and fine your employer up to 200% of the underpayment.

💡 TL;DR — Quick Summary

• Minimum wage 2026: £12.71/hour for ages 21+ (effective 1 April 2026)
• You can report underpayment online, anonymously if you prefer
• HMRC investigates and can recover arrears plus penalties
• Workers are protected by law from retaliation
• Keep records — payslips, hours worked, and communications

Why This Matters in 2026

Despite rising minimum wages, wage underpayment remains a silent issue. In 2025, HMRC identified over 150,000 workers who were underpaid — often by accident, sometimes deliberately.

As the 2026 National Living Wage climbs to £12.71/hour, enforcement is tightening. Knowing how to report underpayment can protect not just your finances, but also your rights and dignity at work.

Step 1: Confirm You’re Being Underpaid

Before filing a complaint, make sure your pay actually falls below the legal minimum for your age or role.

✅ 2026 Legal Minimum Wage Rates

Example:
If you’re 22 years old and earning £12/hour for 20 hours a week, you’re owed at least £0.71/hour more — or £56.80/month in back pay.

Tip: Even if you’re paid “by the job” or per shift, your total pay divided by total hours worked must meet or exceed the hourly minimum.

Step 2: Gather Evidence

Having clear records helps HMRC investigate faster. You don’t need to have everything — but the more evidence, the better.

Collect:

• Payslips or screenshots from your payroll app
• Employment contract or job offer letter
• Work schedules, timesheets, or rota screenshots
• Bank statements showing wage payments
• Any written messages about your pay rate

Pro Tip: Always record actual hours worked, especially if you do unpaid prep time or post-shift duties. Those hours count legally.

Step 3: Speak to Your Employer (Optional)

It’s not required, but sometimes pay issues happen by mistake — wrong age rate, old payroll software, or misclassified role.

Try a polite written message first, such as:

“I’ve noticed my hourly pay appears below the current National Living Wage for my age. Could we review this before I contact HMRC? Thank you.”

If it’s ignored or dismissed, move to Step 4.

Step 4: File a Complaint with HMRC

You can report underpayment online or by phone.
Go to:
👉 https://www.gov.uk/minimum-wage-complaint

You’ll need to provide:

• Your employer’s name, address, and contact details
• Your own contact information (optional if anonymous)
• Details about your job, pay rate, and hours worked
• When the underpayment occurred

🕵️ Confidentiality:

• You can choose to stay anonymous
• HMRC does not tell your employer who made the complaint
• You can also authorize someone (e.g., a union rep) to file on your behalf

Step 5: What Happens Next

After you submit your complaint:

1. HMRC reviews your case and confirms eligibility.
2. An investigation may be opened. They can inspect payroll records, payslips, and bank payments.
3. If underpayment is confirmed, HMRC will order your employer to:
   • Pay you arrears at the current rate, not the historical rate
   • Pay a penalty of up to 200% of the underpaid amount (capped at £20,000 per worker)

Example:
If you were underpaid £300, your employer could owe £300 back pay + £600 penalty = £900 total impact.

Step 6: Your Legal Protections

You’re protected by law under the Employment Rights Act 1996 and National Minimum Wage Act 1998.

That means your employer cannot:

• Fire you for complaining
• Reduce your hours or pay as punishment
• Threaten, pressure, or discriminate against you for reporting

If they do, you can contact ACAS (Advisory, Conciliation and Arbitration Service) for free support or file a tribunal claim.

ACAS Helpline: 0300 123 1100

Step 7: After the Investigation

HMRC will:

• Send you confirmation once the case closes
• Ensure back pay is made directly to you (via employer or HMRC enforcement)
• List the employer publicly on the GOV.UK “named offenders” list if found guilty

You don’t need to attend hearings — HMRC handles everything.

Common Underpayment Scenarios in 2026

Step 8: Follow Up & Stay Informed

You can track updates from:

• GOV.UK – Minimum Wage Enforcement
• Low Pay Commission Reports
• Living Wage Foundation

These sites publish official enforcement actions, new rates, and policy updates every year.

Mini Example: Real Case

“In 2025, a warehouse worker in Birmingham reported being paid £9.80 instead of £11.44. HMRC recovered over £2,000 in back pay and fined the company £4,000. The worker kept their job and received written confirmation that their pay was corrected.”

Real enforcement happens — and it’s more common than people think.

FAQ

Q1: Can I report underpayment anonymously?
Yes. HMRC won’t reveal your identity to your employer.

Q2: What if I’m paid cash in hand below the minimum wage?
You’re still protected. Report the situation — HMRC can investigate tax and pay compliance.

Q3: How long do I have to report?
There’s no strict time limit, but earlier reports are easier to verify.

Q4: What if my employer closes or changes name?
HMRC can still recover pay if business records exist — or through related companies.

Q5: Do unpaid interns qualify for minimum wage?
Only if they’re considered “workers” (regular duties, set hours, supervision). Genuine volunteers do not.