Our approach to Reward
At Tesco, all our colleagues serve customers in a variety of roles and all using different skills and expertise. We want to be an employer of choice - ensuring everyone feels welcome, working with colleagues on their development and long-term careers at Tesco, and offering competitive pay rates and benefits that are sustainable for our colleagues, our different stakeholders and for our business.
For every role in the business, we apply the same principles of Reward. These are applied across our whole reward package, which includes a number of benefits as well as the basic rate of pay.
Always investing in our colleagues
We have a very strong track record of making substantial investments in pay.
Since April 2022 we’ve invested over £900 million in hourly pay rates for our Tesco UK store colleagues. The hourly pay rate for store colleagues increased from £12.02 to £12.45 from 30 March 2025, and will increase again to £12.64 from the end of August 2025. Our London allowance area increased from £13.15 to £13.66 from 30 March 2025, and will increase again to £13.85 from the end of August 2025.
We feel a duty of care to provide our colleagues with a balanced benefits package that supports their different needs. Across all of our markets we offer a competitive package of rewards and benefits, in addition to base pay.
We believe that we are positioned very competitively for both basic pay and total reward; and our colleagues have a very positive view of their reward package. Through our Every Voice Matters survey – the largest colleague engagement programme in the UK – colleague scores on both working at Tesco and their reward package are significantly ahead of our external partner’s global benchmark. In 2025 85% of colleagues said that they would recommend Tesco as a great place to work, an increase from our 2024 score of 84%. In addition, 3% more colleagues (year-on-year) told us they feel their total reward package at Tesco is competitive versus similar jobs elsewhere.
In recognition of the pressures that recent cost of living challenges placed on colleagues, we strengthened the range of free products that we offer in our back of store areas for everyone working in stores, which they can help themselves to while at work. Products available free in our Colleague Rooms in stores include fresh fruit; hot and cold drinks; breakfast items; soup, bread, pasta and noodle snacks; and toiletries including deodorant and sanitary products.
Working collaboratively with our Unions
We spend time listening to how our colleagues are feeling and understanding what matters to them.
When it comes to reward, our package is extensively discussed and negotiated with our independent unions. Colleagues are supported with paid time off from their day jobs to participate in these negotiations.
We have built strong relationships with our unions over the years, and as a result we have long-established full recognition and collective bargaining agreements in place with USDAW, Unite and URTU for all our hourly-paid colleagues across the UK. Our robust engagement process ensures that colleagues and union representatives are involved throughout the process and are consulted before any decisions on reward are finalised. Any decisions we make benefit all eligible colleagues, regardless of whether they are a member of a union or not.
We believe that unions should be as representative as possible, and we actively support colleague membership in many other ways, including offering slots for union representatives in inductions for new starters and offering colleagues the ability to pay union membership fees directly via payroll.
As part of the listening process and in tandem with our extensive pay review process, we continue to make changes to the overall colleague experience based upon feedback about what matters most to our colleagues. For example, as part of our 2022 negotiations for hourly-paid colleagues in UK stores, we allowed colleagues to request a contract review to align to their regular working hours including overtime, and agreed to always offer any vacant hours to colleagues working fewer than 16 hours a week before recruiting externally – both based upon feedback from colleagues. When we do recruit externally, all new contracts will be based on a minimum of 16 hours per week, (save for our smallest Convenience stores) in line with USDAW’s New Deal for Workers campaign.
We will continue to work flexibly when it comes to investing in reward for colleagues.
Our different businesses across the Group undertake their own pay processes, with over 90% of colleagues in each market covered by a collective bargaining agreement with our independent unions. Each part of our business follows the same reward principles to be simple, fair, competitive and sustainable, and with a similar track record of substantial investment in our colleagues.
Our balanced benefits package
Colleague discount
We know colleagues really appreciate the value they get from their Colleague Clubcard, and after one months’ service, colleagues receive a discount card for themselves and a second card for a family member. We are committed to supporting colleagues with the cost of living, including keeping down the cost of their weekly shop. In 2024, we increased the discount allowance by £500, taking the annual total allowance for all colleagues to £2,000. In 2025 we removed the discount allowance so colleagues can enjoy shopping with no cap on their savings. Our Colleague Clubcard is our most widely used benefit, with over 95% of colleagues holding one.
Colleagues can take advantage of a 10% discount, increasing to 15% every payday weekend. Colleagues also receive:
- 20% off F&F clothing, F&F Home and Paperchase
- 10% off The Entertainer range
- 10% off Tesco Café
- 50% off Tesco own brand sanitary care products
- Tesco Mobile colleague deals
- Tesco Insurance and Money Services colleague deals
In addition, over half of our colleagues are registered for our Colleague Deals and Discounts website, which give access to savings and cashback on everyday products and services outside of Tesco.
A competitive pension
We offer a retirement savings plan for all our colleagues. As well as savings for retirement, the plan provides life cover of five times a member’s annual salary. Colleagues are contractually enrolled into our pension scheme with the vast majority remaining in the scheme. At retirement, members are able to choose how to take their savings, in a way that suits them.
Buy As You Earn
The Buy As You Earn scheme is an opportunity for colleagues to buy Tesco shares on a regular basis, from their gross salary. There is total flexibility to start, stop and change the amount of salary used to buy shares at any time.
Save As You Earn
Save As You Earn (SAYE) is our Tesco share savings scheme that gives colleagues the opportunity to save direct from their pay for three or five years. Once they have finished saving, they can choose to buy Tesco shares at a discounted Option Price or get their savings back. It’s our longest running share scheme with thousands of colleagues participating over the last 40 years, currently 18% of our colleagues are actively saving in one or more SAYE scheme. This year more than 17,000 colleagues have shared around a £30 million windfall when they saved into the scheme at an option price of £2.19 (five-year scheme) and £2.42 (three-year scheme), compared to the share price of £3.77 at maturity.
Pay Advance
In November 2022, we launched a new benefit to colleagues in the UK to help with unexpected or large expenses by offering them access to a low-cost advance on their pay. Colleagues can access up to 25% of their contractual pay early for a single set fee of £1.69. The advance is aimed at helping colleagues avoid having to take on expensive debt with high interest payments, such as pay day loans, if they are faced with unexpected bills.
Cycle to Work scheme
The Cycle to Work scheme is a salary sacrifice scheme, designed to encourage healthier and greener journeys to work by providing access to bikes and safety accessories as a tax-free benefit. It is a government supported initiative. To improve accessibility of the scheme, we have changed the loan repayment terms to give colleagues the option to repay over a longer period and enable colleagues to borrow a higher value and access a greater range of bikes.
Virtual GP service
Our Virtual GP service provides around the clock unlimited access to video and phone GP consultations for colleagues and their family. Whether it’s feeling unwell or helping put minds at rest from something bothering them, the service gives fast and free access to a consultation with a GP.
Employee Assistance Programme
We can all benefit with a helping hand to look after our emotional wellbeing. Whether that's to stay mentally healthy, prevent problems from developing or if we are experiencing poor mental health. Our Employee Assistance programme gives colleagues and their family access to in the moment emotional wellbeing support, 24 hours a day. In addition, appointments can also be booked with a whole range of wellbeing experts to support emotional wellbeing and gives access to legal and financial information. The service is completely free and confidential.
Financial Wellbeing
Our Financial Wellbeing Hub contains tips and tools to help colleagues manage their finances, as we look to support them with the cost of living. It shares information on how to make the most of your money, borrow responsibly and find the best options for you and get help identifying your savings goals and discover ways to help you achieve them. We encourage colleagues who may feel they are struggling to speak to their line manager or People team for additional support.
Third-party contractors
In addition to our own colleagues, a number of suppliers and contractors perform certain services in our stores, distribution centres and other Tesco locations. We have a strict set of policies to ensure that all our suppliers and third-party contractors have robust ethical policies, comply with the Ethical Trading Initiative Base Code and meet all legal requirements. We encourage them to reward their employees appropriately, as they balance the needs of all their stakeholders and the long-term viability of their businesses when setting pay rates for their teams.