Guide to Becoming a Living Wage Employer

Your people

Being a Living Wage employer is good for your employees, your business and society. Becoming an accredited Living Wage employer demonstrates a commitment to an ethical benchmark of responsible pay. Our guide shares information from the Living Wage Foundation on what the benefits of becoming a Living Wage Employer and the next steps to becoming accredited.

What’s the Living Wage?

It’s an hourly rate set independently by the Living Wage Foundation, updated annually and calculated according to the basic cost of living in the UK. It’s voluntarily paid by over 5,000 businesses who believe their employees deserve a fair day’s pay for a hard day’s work. The UK Living Wage is £9.90 per hour, and the London Living Wage is £11.05 per hour, significantly higher than the statutory minimum wage (these rates are correct as of November 2021). Here’s the calculation for an annual living wage salary: LW x hours worked per week x 52

Why should you pay it?

The Living Wage is a voluntary higher base rate of pay, and it provides a benchmark for responsible employers who choose to pay their employees a wage that meets the basic cost of living in London and the rest of the UK.There are over 5,000 accredited Living Wage employers, including 1/3 of the FTSE 100.

It benefits your employees:

  • They don’t have to worry about affording the basics
  • They can build up their savings
  • They’ll have more time to spend with their families and friends

And your business:

  • It enhances your reputation as an employer
  • It increases staff retention rates
  • It improves relations between managers and employees

Some challenges you might face include affordability, maintaining pay differentiation and the potential for Living Wage rate to rise each year.

What’s the accreditation journey? 

Get ready:

  • Start paying the current real living wage to all your directly employed employees
  • Plan to pay your on-site contractors the current real living wage
  • Complete the Living Wage Foundation’s application form

Persuade your senior team:

  • Tell them about the business benefits
  • Use the Living Wage Foundation’s online case studies showcasing the positive impacts, such as improved staff engagement and public image
  • You can use toolkits online to make the accreditation process a smooth and quick transition

Get accredited:

  • Costs start at £60 a year and are based on the size of your business
  • If all your directly employed and contracted staff are paid the living wage, the accreditation license will be processed in ten working days
  • If your contractors can’t pay the living wage, you must commit to renewing contracts at the living wage

…and once you’re accredited:

You’ll appear on the Living Wage Foundation’s map so consumers, prospective employees, students and funders can easily see who pays a wage that meets the cost of livingYou can display the Living Wage Employer to recognise your commitment.

Communication is key!

Make sure you’re shouting about being a Living Wage Employer by…

  • Displaying the Living Wage Employer Mark on your website, your email signature and your marketing materials
  • Telling your employees – put the Living Wage plaque you’ll receive in a prominent place at work
  • Talking about it in your supply chain – tell everyone you do business with, and encourage them to implement the Living Wage too
  • Join in the conversation – use your social media channels to show your commitment and encourage other businesses to sign up

For more information and to start your accreditation journey, go to the Living Wage Foundation’s website.


Updated in November 2021 by Heart of the City