When is Tesco Pay Rise 2025? – What’s Changing and Why It Matters

Tesco Pay Rise 2025

When is Tesco pay rise 2025? In 2025, Tesco UK is set to roll out a major pay increase for its store and fulfilment colleagues through a two-phase rise. This move highlights Tesco’s strong commitment to fair and competitive wages, helping team members keep up with the rising cost of living. Backed by a £180 million investment, the new pay structure will raise hourly rates above the National Living Wage, while also updating shift premiums and enhancing staff benefits.

What Is Tesco’s New Pay in 2025 and Why Does It Matter?

Tesco has revealed a substantial 2025 pay increase for its UK coworkers, which will be implemented in two stages. The changes are part of Tesco’s continued commitment to rewarding its workforce while staying ahead of government wage standards and inflation.

Tesco 2025 Pay Changes:

• Phase 1: From £12.02 to £12.45 per hour starting 30 March 2025

• Phase 2: At the end of August 2025, the hourly rate will increase from £12.45 to £12.64.

This equates to a 5.2% total increase for the year, which is above the projected inflation rate. The £180 million investment bolsters Tesco’s continued commitment to making employees feel appreciated and financially stable.

By exceeding the National Living Wage (set at £12.21/hour from April 2025) and matching or surpassing the Real Living Wage outside and inside London, Tesco is setting a competitive standard in the retail sector.

When Is Tesco’s 2025 Pay Rise and When Will It Be Paid?

The new pay rates will come into effect in two stages across all eligible Tesco staff in stores and fulfilment centres across the UK.

Key Dates to Note:

• 30 March 2025: First stage of the pay rise takes effect – employees move from £12.02 to £12.45/hour.

• 31 August 2025: Second stage – hourly rate increases again to £12.64/hour.

Payroll Impact:

• April 2025 Pay: Staff will see the March increase reflected in their April wage slips.

• September 2025 Pay: The August rise will be applied to payments in September.

These timely increases help employees plan their finances with greater certainty and benefit from higher take-home pay across the year.

How Much Will Tesco Pay in London?

Due to the higher cost of living in the capital, Tesco offers additional allowances to colleagues working within the M25 London area.

What Is the Tesco 2025 Pay Deal?

The 2025 pay deal was reached through negotiations between Tesco and USDAW (Union of Shop, Distributive and Allied Workers), reflecting shared goals of fair pay, sustainable conditions, and employee wellbeing.

Key Highlights of the 2025 Pay Deal:

1. Two-Stage Pay Rise (5.2% Increase):

   • A fair, structured rise over the year protects earnings against inflation.

   • Aligns with national economic benchmarks and internal salary reviews.

2. Sunday Premium Removal + Buyout:

   • The traditional extra Sunday pay rate will be phased out.

   • To compensate, a one-off 18-month lump-sum buyout will be paid to eligible staff.

3. Night Shift and Shift Leader Premiums Enhanced:

   • Extra pay for night shifts and shift leadership roles is being improved.

   • Reflects the higher demands and unsociable hours of these roles.

4. Unlimited Colleague Discount (Clubcard):

   • Removal of the annual cap on the Colleague Clubcard Discount.

   • Employees get a 20% discount on most Tesco purchases year-round.

5. Extended Sick Pay:

   • From August 2025, Tesco will extend paid sick leave to up to 20 weeks.

   • Enhances employee support during long-term illness and reduces financial anxiety.

These measures aim to balance financial reward, fairness, and wellbeing, helping Tesco retain and motivate staff in a competitive retail environment.

Do Tesco Pay Bonuses to Staff?

This pay deal isn’t just a wage increase—it represents Tesco’s broader investment in its workforce. By exceeding national minimum standards and introducing supportive policies, Tesco is:

• Strengthening employee loyalty

• Maintaining a competitive advantage in retail recruitment

• Responding to the cost-of-living pressures felt by millions across the UK

• Offering financial stability and predictability for working families

Tesco Pay 2025 Calculator: Estimate Your New Earnings

Tesco colleagues can estimate their expected weekly and monthly income using the new 2025 hourly pay rates. The table below gives a helpful overview based on typical working hours.

Weekly Hours	March Rate (£12.45)	August Rate (£12.64)
20	£249.00	£252.80
30	£373.50	£379.20
37.5	£466.88	£474.00
40	£498.00	£505.60

How to Calculate Your Own Pay:

1. Weekly Pay = Your contracted weekly hours × new hourly rate

2. Monthly Pay Estimate = Weekly Pay × 4.33 (average number of weeks in a month)

Example Calculation:

If you work 37.5 hours per week:

• After August 2025:
  37.5 × £12.64 = £474.00/week

• Monthly:
  £474.00 × 4.33 = ~£2,052/month

This simple method allows Tesco colleagues to understand their expected income under the new pay structure and plan accordingly.

Do Tesco Staff Get a 20% Discount?

Yes, Tesco employees enjoy an industry-leading 20% discount through the Colleague Clubcard scheme, offering real savings on everyday purchases.

• Eligibility: Activated after 3 months of continuous employment

• Usage: Applies to both in-store and online purchases at Tesco

• Extended Access: Can be shared with a nominated second user (such as a partner or family member)

• No Limit: The £2,000 yearly maximum was eliminated permanently in 2024, allowing you limitless use all year long.

This generous benefit significantly enhances the value of employment with Tesco, helping colleagues and their families manage household budgets more effectively.

Do Tesco Staff Get Paid Double on Sundays?

No, Tesco is phasing out the Sunday premium as part of its 2025 pay structure reform.

Changes to Sunday Pay:

• From 30 March 2025, new Tesco staff will no longer receive any Sunday premium.

• Existing staff will receive a one-time buyout payment to compensate for the removal of the 10% Sunday premium.

This change brings Tesco in line with several competitors who have already discontinued premium Sunday pay, simplifying wage structures across the retail sector.

What Is the Deal with the Sunday Premium and Buyout?

The Sunday premium buyout is a compensation mechanism for existing staff who currently receive extra pay for Sunday shifts.

How It Works:

• The customary 10% premium, which is additional compensation for working on Sundays, will no longer be offered.

• Eligible staff will receive a lump-sum payment equivalent to 18 months’ worth of the Sunday premium based on their actual 2024 Sunday hours

• New hires after 30 March 2025 will not be eligible for Sunday premiums or the buyout

This buyout helps ease the transition for current employees while modernizing Tesco’s pay practices to reflect industry norms.

What Other Tesco Colleague Benefits Are Offered?

In addition to pay increases, Tesco is expanding its benefits package to offer stronger financial and wellbeing support to staff.

Updated Colleague Benefits in 2025:

• Shift Leader Premium: Increased to £2.31 per hour for added responsibility

• Night Shift Premium: Increased by 5p per hour, recognizing unsociable working hours

• Extended Sick Pay: Eligible employees can now receive up to 20 weeks of paid sick leave from August 2025

• Uncapped Clubcard Discount: No longer limited to £2,000/year – savings potential is now unlimited.

• Enhanced Family Support: Includes maternity, paternity, adoption leave, and emergency caregiver leave (varies by contract)

These benefits demonstrate Tesco’s investment in long-term employee satisfaction, health, and career development.

Who Negotiated the Tesco Pay Deal 2025?

The 2025 pay agreement was jointly reached by:

Jointly Agreed By:

• Tesco PLC

• USDAW, representing the majority of Tesco’s retail workforce

USDAW’s Role:

• Advocated for inflation-proofed wage increases

• Secured enhanced benefits like the extended sick pay and Sunday buyout

• Ensured that wage changes reflected living costs and protected long-serving staff

This partnership ensures the pay deal is not only fair but also aligned with both business goals and employee wellbeing.

How Does Tesco Pay Compare With Other UK Supermarkets?

Tesco’s revised pay structure is competitive and in many cases exceeds the wages offered by other leading supermarket chains in the UK.

Current Retail Pay Comparisons:

• An uncapped discount program (many competitors still limit theirs)

• A phased pay increase that helps ease budgeting pressure

• Extended sick pay beyond industry norms

Overall, Tesco’s 2025 pay package positions it as a top-tier employer in the retail sector, offering both strong financial rewards and meaningful employee benefits.

Why Tesco Pay Rise 2025 Matters for UK Colleagues and Consumers

• The two-stage Tesco pay rise ensures staff stay well above the National Living Wage (£12.21) and Real Living Wage.

• Despite removal of the Sunday premium, the total compensation (including one-off buy‑out) likely maintains financial fairness.

• This pay policy helps Tesco remain competitive amid rising operational costs like higher national insurance and minimum wage.

Conclusion: Is the Tesco Pay Rise 2025 Good for Workers?

The 2025 pay rise is a strong commitment from Tesco to invest in its workforce. With:

• 5.2% pay increase over six months.
• Fairer pay structures across regions and roles.
• Enhanced benefits and shift premiums.

Tesco is addressing employee needs while remaining competitive in the retail labor market.

FAQs: Tesco Pay Rise 2025 Explained

 

1. What is Tesco’s new pay rate in 2025?

£12.45/hour from March, rising to £12.64/hour by August. London workers receive more.

2. When will the Tesco pay rise be paid?

In April and September payrolls following the March and August changes.

3. Do Tesco staff get a 20% discount?

Yes, available after three months, with no cap on annual spend.

4. Do Tesco staff receive bonuses?

Some roles qualify for performance or discretionary bonuses, but no universal bonus scheme exists.

5. Do Tesco staff get paid double on Sundays?

No, but a one-time buyout covers Sunday premium loss.

6. Who negotiates Tesco pay?

Tesco and USDAW negotiate the agreement.

7. How does Tesco’s pay compare with other supermarkets?

Tesco’s pay is competitive with Sainsbury’s, Aldi, Lidl, and Co-op.

8. What other benefits do Tesco staff get in 2025?

Increased sick leave, better shift compensation, and unlimited employee discounts.