LIDL is to pay the voluntary living wage of £8.45 an hour and £9.75 in London, higher than the statutory rate, to thousands of its workers.
The supermarket giant said the rates will be paid from March to 5,500 employees, a quarter of its UK workforce.
The rates are higher than the national Living Wage of £7.20 an hour, which the Chancellor announced in his Autumn Statement will go up to £7.50 next April.
Lidl board director Nan Gibson said: “We recognise the contribution of each and every colleague within the business and we feel it’s important to celebrate our achievements together.
“So it fills me with pride that our colleagues are amongst the best paid in the supermarket sector, and it’s absolutely deserved for the commitment and value they bring to the company every day.”
Lidl, which has 640 supermarkets in the UK, said its investment would cost £3 million.