Aldi is raising its starting pay for all supermarkets store assistants to £11 an hour, with London workers getting £12.45.
Around 26,000 store colleagues will benefit from the increase, which will come into force from January 1, 2023.
The new £11-an-hour starting rate is over 15% higher than it was a year ago.
It also means Aldi will once again become the top-paying UK supermarket, after Lidl upped its hourly pay from £10.10 to £10.90.
Lidl workers in London have seen their pay rise from £12 to £13.
In comparison, Tesco is upping employees’ hourly pay by 20p to £10.30 from next month.
For staff in London, the rate will go up to £10.98, making an 8% increase in the supermarkets hourly pay in the last 12 months.
Tesco chief executive Ken Murphy said the pay rise is meant to help workers cope through the cost of living crisis, so they "don't have to go to food banks".
Morrisons ' pay rise, which came into effect this month, has seen its staff hourly pay go up to £10.20.
Employees in London will get £11.05 an hour to reflect the higher cost of living in the capital.
Asda workers take home £10.10 an hour while Sainsburys staff get £10.25.
Last month, Marks & Spencer announced a second boost for around 40,000 workers which will increase hourly pay to £10.20.
Some supermarkets are offering extra perks to help workers tackle rising costs.
Sainsbury’s is giving staff free food during shifts until the end of the year, while Tesco has doubled its staff discount.
The new rates set by Aldi exceed the Real Living Wage of £10.90, set by the Living Wage Foundation.
Aldi is also the only supermarket offering paid breaks, which amount to an additional £871 a year for the average store worker.
Logistics colleagues will also get a boost, with starting salaries of at least £10.90 in line with the Real Living Wage.
Giles Hurley, chief executive of Aldi UK and Ireland, said: “Just as we promise Aldi customers that we will always offer the lowest grocery prices in Britain, we are committed to being the highest-paying supermarket for our colleagues."
Aldi is hiring 100 area managers for its stores - and the roles pay up to £81,000.
The discount supermarket has opened up its training programme for area managers.
People taking part get a year of training.
After that they'll have all the skills they need to run all Aldi branches in an area.
Salaries start from £44,000 for successful applicants in the first year, with permanent contracts offered after that point.
Pay rises to more than £81,000 by the fifth year.
Those interested in applying for the area manager scheme should visit the Aldi website.
Aldi has also revealed its wish list for where it wants to open 16 new stores - as the firm becomes Britain’s fourth-largest supermarket.
The discount supermarket has more than 970 stores in the UK, and now wants to open 16 more by the end of the year.
Aldi also said it will soon be hiring for 6,000 more jobs.
