Updated October 2026
April 2026 rates — Output work NMW rules

Piece Rate / Output Pay Calculator

Check whether your piece rate pay meets National Minimum Wage, or calculate the legally required minimum rate per piece under the HMRC fair piece rate formula — including the 120% multiplier.

£
✓ Your piece rate meets the statutory Fair Piece Rate requirements.

Statutory Fair Piece Rate (120% Formula)

£0.763 / item

Your Piece Rate

£0.800

Fair Min Rate

£0.763

Your Hourly Pay

£16.00/hr

NMW Minimum

£12.71/hr

HMRC "Fair Piece Rate" Rules (NMWM03140):

  • The 120% Multiplier: By law, the fair rate is calculated as: (NMW Rate ÷ Mean Output per Hour) × 1.2.
  • Written Notice: The employer must provide written notice explaining the mean hourly output test before you begin work.
  • Invalid Test Protection: If the employer fails to conduct a valid rated output test, you are legally entitled to standard minimum wage (£12.71/hr) for every hour worked.

What Is Output / Piece Rate Work?

Output work (also known as piece work or piece rate pay) is one of four recognised types of work for NMW purposes. A worker is on output work when their pay is determined by the number of pieces produced, tasks completed, or items processed — rather than by the hours they work.

Common examples include: fruit and vegetable picking, packing and assembly line work, garment manufacture and sewing, data entry at a per-record rate, and some types of driving or delivery work paid per drop.

Key rule: Regardless of how many pieces you produce, your total earnings for any pay reference period must equal at least NMW multiplied by the number of hours you worked. If your piece rate is too low to achieve this, your employer must make up the difference.

The 120% Multiplier Explained

When an employer sets a fair piece rate, they use the average output from a rated output test as the benchmark. However, they must then multiply that baseline by 1.2 (120%) before dividing into the NMW rate. This produces a fair piece rate that is 20% higher than what is strictly necessary for an average worker.

The effect is that a worker only needs to reach 83.3% of average output (100 ÷ 120 = 0.833) to earn NMW. Workers who are naturally slower, who are learning, or who have a health condition are protected from falling below the legal minimum simply because they cannot keep pace with the average.

Average output

100%

Used in rated output test

Fair piece rate set at

120%

NMW ÷ (pieces/hr × 1.2)

Minimum to earn NMW

83.3%

Slower workers protected

The Rated Output Test — Employer Obligations

Before setting a piece rate, employers must establish the average number of pieces a worker can produce per hour when working at a normal, sustainable pace. This is known as the rated output test and is a legal requirement under the National Minimum Wage Regulations 2015.

  • The test must measure a typical worker's average output, not the fastest or slowest.
  • As an alternative to a formal test, the employer and worker may agree on an average output figure — but both parties must genuinely agree.
  • The employer must keep records of the test and be able to demonstrate to HMRC that the piece rate was set correctly.
  • If no rated output test has been conducted, the employer cannot set a lawful fair piece rate and may be in breach of NMW law.

April 2026 National Minimum Wage Rates

Age Band Hourly Rate Fair rate @ 10 pieces/hr
21 and over (National Living Wage) £12.71 £1.525
18 to 20 £10.85 £1.302
Under 18 (school leaving age+) £8.00 £0.960
Apprentice (year 1 or under 19) £8.00 £0.960

Example fair piece rate shown for 10 pieces/hour: (NMW × 1.2) ÷ 10. Rates effective from 1 April 2026, verified via GOV.UK.

Frequently Asked Questions

Piece rate pay (also called output pay) means you are paid per item you produce, task you complete, or piece of work you deliver — rather than for each hour worked. Common examples include picking fruit and vegetables, packing goods, garment sewing, and assembly work. You are still entitled to at least the National Minimum Wage for every hour you actually work, regardless of how many pieces you produce.
Your effective hourly rate is calculated by dividing your total pay in a pay reference period by the total hours you worked. That effective rate must be at least the NMW for your age band. If you produced 200 pieces in 10 hours and were paid £100 total, your effective rate is £10.00/hr — which falls below the 21+ NLW of £12.71/hr and would be unlawful.
When an employer sets a "fair piece rate", they must apply a 120% multiplier to the average output rate. This means the rate per piece is calculated as: (NMW ÷ average pieces per hour) × 1.2. In practice, this means a worker only needs to produce 83.3% of the average output to earn NMW. The multiplier protects slower workers — those who work more carefully, are newer to the job, or have a disability — from falling below minimum wage through no fault of their own.
No. Employers who pay piece rates must conduct a "rated output test" to establish the average number of pieces a worker can produce per hour working at their normal pace. Without this test, the employer cannot legally set a fair piece rate. HMRC guidance (NMWM03140) is clear that the test must be carried out. If your employer has not done so, they may be in breach of NMW regulations and you should report the situation to HMRC.
Yes. NMW applies to all piece rate workers in agriculture, just as in any other sector. If your effective hourly rate falls below NMW, your employer is in breach. Additionally, workers in Scotland are covered by separate Agricultural Wages (Scotland) Act provisions, and workers in Wales are covered by the Agricultural Advisory Panel for Wales — both of which may set higher minimum rates than the standard NMW. Always check the relevant Agricultural Wages Order for your region.

About this guide

This calculator is maintained by UKMinimumWage.co.uk using published GOV.UK rates for 2026/27. Last updated October 2026. This site is not HMRC-endorsed.