Last Updated On – 01-10-2026
Tesco has increased its standard hourly rate for eligible UK store and online fulfilment colleagues by 5.1%, from £12.64 to £13.28 an hour, with the new rate applying from 29 March 2026.
For colleagues working within the M25, the London Location Allowance increased to £1.27 an hour, taking total hourly pay to £14.55.
The deal represents an investment of more than £200 million in colleague pay.
Tesco says hourly pay has increased by 43% over five years, while retail union Usdaw described the agreement as an above-inflation settlement negotiated through its collective bargaining arrangement with the supermarket.
| Tesco pay detail | 2025 rate | 2026 rate |
|---|---|---|
| Standard hourly rate | £12.64 | £13.28 |
| London Location Allowance | £1.21 | £1.27 |
| Total rate within M25 | £13.85 | £14.55 |
| Increase in standard rate | — | 5.1% / 64p an hour |
| Effective date | — | 29 March 2026 |
The £13.28 rate is 57p above the £12.71 National Living Wage applying to workers aged 21 and over from 1 April 2026.
How Much Is the Tesco Pay Rise Worth?
The Tesco pay rise added 64p to the basic hourly rate, moving it from £12.64 to £13.28.
The precise increase in annual earnings depends on the number of paid hours worked. Before income tax, National Insurance, pension contributions or other deductions, the approximate increase is:
| Paid hours per week | Extra per week | Extra per year |
|---|---|---|
| 16 hours | £10.24 | £532.48 |
| 20 hours | £12.80 | £665.60 |
| 30 hours | £19.20 | £998.40 |
| 40 hours | £25.60 | £1,331.20 |
These figures assume the same number of paid hours is worked for 52 weeks.For a colleague inside the M25, the change is larger in cash terms because both elements increased.
The basic rate rose by 64p while the London allowance moved from £1.21 to £1.27, adding another 6p. That means the combined London rate increased by 70p an hour, from £13.85 to £14.55.
Who Gets the £13.28 Tesco Hourly Rate?
Tesco’s March announcement states that the £13.28 hourly rate applies to hourly-paid colleagues in stores and online fulfilment centres.
The announcement does not describe the increase as a universal pay rise covering every Tesco employee.
This distinction matters because Tesco employs people under a range of arrangements, including store colleagues, online fulfilment workers, distribution employees and salaried head-office or management staff.
Salaried employees should therefore not assume that a 5.1% increase automatically applies to their salary.
Current Tesco recruitment material shows salaried positions operating under separate salary and reward arrangements, including role-dependent bonus schemes.
Does the Tesco pay rise apply to workers under 21?
Tesco’s 2026 announcement presents £13.28 as its established rate for hourly-paid store and online fulfilment colleagues and does not publish a separate lower youth rate in that announcement.
There is also historical precedent for Tesco paying its negotiated retail rate irrespective of age. Usdaw explicitly stated when announcing the 2023 Tesco agreement that the rate applied to staff of all ages.
Employees should nevertheless check the rate shown in their individual contract, Tesco colleague information or current vacancy documentation where their circumstances differ.
The statutory position is separate. From 1 April 2026, the legal minimum is £12.71 for workers aged 21 and over, £10.85 for those aged 18 to 20, and £8 for workers aged 16 to 17 and qualifying apprentices.
Do Tesco Warehouse and HGV Workers Get the Same Pay Rise?
Not necessarily.
One of the most important developments since the original Tesco pay-rise announcement came in September 2026, when more than 3,000 Tesco warehouse workers and HGV drivers accepted a separate 4.5% pay increase.
Workers at Didcot, Belfast, Doncaster and Thurrock had previously rejected a 4% proposal. Unite said members later accepted the improved 4.5% offer, ending the threat of industrial action.
Around 700 workers in Didcot, 400 in Belfast, 600 in Doncaster and 1,400 in Thurrock were reported to be covered by the settlement.
The dispute followed the 5.1% increase awarded to store colleagues earlier in the year. This means it would be misleading to describe the March £13.28 agreement as automatically covering every Tesco warehouse or distribution employee.
Store and online fulfilment pay and distribution-sector settlements should therefore be treated separately.
What Other Benefits Do Tesco Employees Receive?
Tesco’s remuneration package extends beyond the hourly rate.
The company’s published benefits include a Colleague Clubcard discount of 10%, rising to 15% on payday weekends, a retirement savings plan with Tesco matching qualifying contributions up to 7.5%, share-saving arrangements and access to an Employee Assistance Programme.
Tesco also provides a virtual GP service.
Family-related benefits include 26 weeks of fully paid maternity leave and six weeks of fully paid paternity leave under Tesco’s published package, subject to the applicable policy and eligibility requirements.
Tesco has also retained full recognition and collective bargaining arrangements with Usdaw for its hourly-paid colleagues, making union negotiation an important part of its retail pay-setting process.
Ashwin Prasad, Tesco UK CEO, described the 2026 settlement as “another meaningful investment in colleague pay”, while Usdaw national officer Daniel Adams said the deal “extends the gap between the Tesco rates of pay and the National Living Wage.”
What Is Tesco’s New Domestic Abuse Leave Policy?
The 2026 pay announcement contained another significant employment-policy commitment.
Tesco said it would become the first retailer to commit to paid leave supporting colleagues experiencing domestic abuse.
Its March announcement said the new policy would include up to three days of paid leave, with further details to be set out later in 2026.
That wording is important. As of 1 October 2026, the public Tesco announcement located for this update still describes the measure as a commitment whose fuller policy details would be provided later in the year.
The article should therefore avoid presenting unverified additional eligibility rules as though they have already been publicly confirmed.
How Does Tesco Pay Compare With Other Supermarkets in 2026?
Tesco’s £13.28 standard rate remains above the statutory National Living Wage, but it is not the highest published entry-level supermarket rate.
The closest comparison among major supermarkets is:
| Supermarket | National rate | London/M25 rate |
|---|---|---|
| Aldi | £13.50 | £14.88 |
| Lidl | £13.45 | £14.80 |
| Tesco | £13.28 | £14.55 |
| Sainsbury’s | £13.23 | £14.54 |
Aldi’s rate increased to £13.50 nationally and £14.88 inside the M25 from 1 April, while Lidl moved to £13.45 nationally and £14.80 in London from 1 March. Sainsbury’s introduced £13.23 nationally and £14.54 in London from 29 March.
The wider 2026 supermarket pay comparison shows how competitive the sector has become, while Live Business Blog also covers the individual Aldi pay rise, Lidl pay changes and Sainsbury’s 2026 pay increase.
Other large retailers have also raised wages.
M&S increased customer-assistant pay by 6.4% to £13.41 nationally and £14.74 in London from April, while John Lewis Partnership raised shop-floor minimum rates by 6.9% to £13.25 nationally and £14.80 within the M25. Co-op customer-team-member pay reached £13.04 from April.
Asda also implemented a two-stage increase, ultimately taking its hourly retail rate to £13.10 nationally and £14.35 inside the M25 from 5 July 2026.
Does Tesco Pay the Real Living Wage?
This needs to be distinguished carefully from the government’s National Living Wage.
The National Living Wage is the statutory minimum for workers aged 21 and over and is £12.71 from April 2026. Tesco’s £13.28 base rate is therefore 57p above the legal minimum.
The real Living Wage, calculated independently according to living costs, is higher: £13.45 across the UK and £14.80 in London for the current rate referenced in 2026.
That produces the following comparison:
| Benchmark | Rate | Tesco rate | Difference |
|---|---|---|---|
| National Living Wage | £12.71 | £13.28 | Tesco +57p |
| Real Living Wage – national | £13.45 | £13.28 | Tesco -17p |
| Real Living Wage – London | £14.80 | £14.55 | Tesco -25p |
Tesco therefore pays above the statutory minimum but below the voluntary real Living Wage benchmark.
This is a change from earlier years. Tesco’s 2024 £12.02 rate was announced as being above the real Living Wage nationally, and the company also structured its London rate to remain in line with the London benchmark at that time.
In 2026, campaign organisation ShareAction has been pressing major supermarkets to return to real Living Wage levels.
Reporting on the campaign noted that Tesco and Sainsbury’s had ceased matching the benchmark in 2025, while M&S and Co-op have also moved away from previous alignment.
Aldi and Lidl were identified as the major supermarkets continuing to meet or exceed the national real Living Wage at entry level.
How Does Tesco’s Pay Rise Compare With Its Profits?
Tesco’s 2025/26 results provide useful financial context for the pay agreement.
For the comparable 52-week period, Tesco reported £66.588 billion in group sales excluding VAT and fuel and £3.152 billion in adjusted operating profit, compared with £3.128 billion in the previous year.
On the statutory 53-week basis, adjusted operating profit was £3.194 billion.
The £200 million-plus investment in the store and online fulfilment pay award therefore sits within a business reporting more than £3.1 billion of annual adjusted operating profit.
Usdaw framed the 5.1% award as a real-terms improvement for its members when the settlement was announced. Tesco likewise described the increase as above inflation at the time of the March announcement.
How Has Tesco Hourly Pay Changed Since 2022?
The current £13.28 rate is the latest step in a series of significant increases since 2022.
| Effective period | Standard hourly rate | Change |
|---|---|---|
| July 2022 | £10.10 | 5.8% increase from £9.55 |
| November 2022 | £10.30 | Additional increase |
| April 2023 | £11.02 | 7% increase from £10.30 |
| April 2024 | £12.02 | 9.1% increase |
| March 2025 | £12.45 | First stage of 2025 deal |
| August 2025 | £12.64 | Second stage of 2025 deal |
| March 2026 | £13.28 | 5.1% increase |
Tesco initially moved the rate from £9.55 to £10.10 in July 2022 before another increase took it to £10.30 in November.
The company then increased store pay to £11.02 from 2 April 2023.
In April 2024 the rate increased from £11.02 to £12.02, not £11.83. That corrects an error in the previous version of this article.
The 2025 agreement then increased pay in two stages: from £12.02 to £12.45 on 30 March and to £12.64 from 31 August.
Finally, the March 2026 settlement raised the rate to £13.28, leaving hourly-paid Tesco colleagues with a reported 43% increase over five years.
What Is the Tesco Pay Rise in Ireland for 2026?
Tesco Ireland operates under separate pay arrangements and should not be confused with the UK agreement.
From 1 January 2026, hourly-paid Tesco Ireland store and distribution workers received a 3% increase, taking the company’s average hourly rate to €18.13.
Tesco Ireland said the package formed part of more than €15 million of additional investment in pay and benefits during 2026, alongside investment in auto-enrolment pensions and additional permanent working hours.
The Irish increase therefore does not determine the rate received by Tesco employees in England, Scotland, Wales or Northern Ireland.
What Could Happen to Tesco Pay in 2027?
There is no confirmed Tesco retail pay rate for 2027 yet.
The most important external benchmark will be the National Living Wage applying from April 2027.
The Low Pay Commission was asked by the Government to make its recommendations during October 2026. As of now, a final 2027 statutory rate had not yet been published in the official sources checked for this update.
Earlier Low Pay Commission modelling estimated that maintaining the National Living Wage at two-thirds of median hourly earnings could require a 2027 rate between £13.02 and £13.34, with a central estimate of £13.18.
The commission stresses that these are indicative figures, not the final recommendation.
Tesco’s current £13.28 rate is already within that indicative range, but that does not mean the company will leave its rate unchanged.
Tesco and Usdaw could negotiate another increase for recruitment, retention, inflation or competitive reasons irrespective of the statutory minimum.
Past Tesco agreements have often been announced around February or March, so another early-2027 negotiation would be consistent with recent practice.
However, until Tesco or Usdaw confirms the next settlement, any specific 2027 Tesco rate would be speculation.
When Should the Tesco Pay Rise Appear on a Payslip?
The official effective date for the £13.28 rate was 29 March 2026. Eligible hours worked from the effective point should therefore be paid according to the applicable new rate, subject to Tesco’s payroll periods and individual employment arrangements.
Employees checking whether their pay has been updated should compare the hourly-rate entry on their payslip with their role, location and hours worked rather than relying only on the final net-pay figure.
For an eligible standard store or online fulfilment colleague, the basic rate should correspond with £13.28. For an eligible colleague within the M25 receiving the London Location Allowance, the published combined rate is £14.55.
Where the rate appears incorrect, colleagues can check Tesco’s internal colleague information, raise the issue with their manager or payroll/People team, or contact their Usdaw representative if they are union members.
What Does the Tesco Pay Rise Mean for Employees?
The position is now considerably clearer than it was at the beginning of 2026.
Tesco has not simply increased its rate enough to comply with the National Living Wage.
It agreed a 5.1% rise to £13.28, maintaining a 57p margin over the £12.71 statutory rate for workers aged 21 and over. Inside the M25, eligible colleagues receive £14.55 including the £1.27 London Location Allowance.
At the same time, Tesco remains below the voluntary real Living Wage benchmark, and Aldi and Lidl currently publish higher standard entry-level rates.
Distribution employees have also followed a different negotiating route, with more than 3,000 warehouse and HGV workers accepting a separate 4.5% increase in September.
For employees, the most relevant figure therefore depends on where they work, what part of Tesco they work in and whether their role is hourly paid or salaried.
FAQs About the Tesco Pay Rise
What is Tesco’s hourly rate now?
The standard published rate for eligible hourly-paid Tesco store and online fulfilment colleagues is £13.28 an hour, effective from 29 March 2026.
When did the Tesco pay rise start?
The 5.1% increase took effect on 29 March 2026.
How much was Tesco pay before the 2026 increase?
The standard hourly rate was £12.64 after the second stage of Tesco’s 2025 pay agreement took effect in August 2025.
How much does Tesco pay in London?
Eligible colleagues inside the M25 receive a published total rate of £14.55 an hour, consisting of the £13.28 base rate plus a £1.27 London Location Allowance.
Is Tesco pay above the National Living Wage?
Yes. Tesco’s £13.28 rate is 57p above the statutory £12.71 National Living Wage applying to workers aged 21 and over from April 2026.
Does Tesco pay the real Living Wage?
The standard Tesco rate is currently below the voluntary real Living Wage benchmark. The benchmark is £13.45 nationally and £14.80 in London, compared with Tesco’s £13.28 and £14.55 respectively.
Do Tesco warehouse workers get the 5.1% increase?
Distribution workers can be covered by separate agreements. In September 2026, more than 3,000 Tesco warehouse workers and HGV drivers accepted a separate 4.5% pay increase following a dispute over an earlier 4% proposal.
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