The Calculation

The Living Wage - Based on the Real Cost of Living
Independently calculated every year to meet the real cost of living.
  • The London Living Wage is currently £10.55 per hour. This covers all boroughs in Greater London.
  • The UK Living Wage for outside of London is currently £9.00 per hour.
  • The rates are calculated annually by the Resolution Foundation and overseen by the Living Wage Commission, based on the best available evidence about living standards in London and the UK.
  • The basket of goods draws on the Minimum Income Standard to identify everyday living costs through public consensus. 
  • Before 2016 the London Living Wage was calculated by the Greater London Authority and the UK rate was calculated by the Centre for Research in Social Policy at Loughborough University.

Living Wage employers should implement the new rates as soon as possible and within six months of the annual announcement. For more information please visit our FAQs page

Minimum Income Standard

We use a public consultation method called MIS to inform the rate. MIS asks groups to identify what people need to be able to afford as a minimum. This is fed into a calculation of what someone needs to earn as a full-time salary, which is then converted to an hourly rate.

Read more

London Minimum Income Standard

Living costs are much higher in London than in the rest of the UK - that is why the London Living Wage is higher than the UK rate. Our calculation is based on living costs and when it is annually recalulated we take into account any fluctuation in those costs. Rent is the primary living cost that causes the differential between the two rates but we also take into account childcare, travel costs, food and household bills.

Read more