Aldi plans to increase pay for its staff by just over 3%, making it one of the best-paying supermarkets in the UK.
The discounter said its minimum hourly pay rates will rise from £9.10 an hour to £9.40, with workers inside the M25 getting £10.90 an hour instead of £10.55.
Employees who have been with the business for three years or more will see their pay increase to £10.41 an hour, while workers in London with two years' service will earn £11.15.
Giles Hurley, chief executive of Aldi UK, said: "We have the most efficient and productive workforce, and this is why they earn the highest rates of pay in the grocery sector."
Aldi is not the only big retailer trying to improve what it can offer its employees.
Greggs recently announced its staff would share a £7m bonus and Mike Ashley of Frasers Group - formerly Sports Direct - vowed last year to introduce a new bonus scheme for staff.
Aldi, Britain's fifth-largest supermarket, also said it would be hiring 3,800 new employees for store level positions.
The expansion will help the chain increase its stores from the current 874 to a target of 1,200 by 2025.
Latest industry figures put Aldi's share of the grocery market at 8%, up from 7.6% a year ago.
Along with fellow discounter Lidl, Aldi has been eating away at the dominance enjoyed by Tesco, Sainsbury's, Asda and Morrisons, known as the "big four" supermarkets. Earlier this month German-owned Aldi said the four weeks to 24 December represented its "best ever Christmas in the UK" with sales up 7.9% on a year ago.
It said this was driven by demand for beer, wine and spirits - with sparkling wine sales up 14% - as well as its premium food ranges and fresh British meat.
However the company, which has been expanding rapidly, did not disclose like-for-like sales figures - a standard industry metric which looks at growth in stores that have been open for a year or more - though a company spokesman said at the time that they had been positive.