From tomorrow Costa baristas in London (of all ages) will earn a minimum of £8.20 an hour, rising to over £9, the Whitbread-owned chain said.
Meanwhile staff working at Costa coffee shops outside the capital will be paid a minimum of £7.40 an hour, once they have completed their initial training.
The move puts their pay above George Osborne’s National Living Wage of £7.20 per hour for over 25 year-olds, which comes into force next April.
However, it is still below the Living Wage Foundation’s recommended hourly rate of £7.85 in UK and £9.15 in London.
Starbucks, Ikea, Oliver Bonas and Sainsbury’s have also committed to paying their staff higher wages.
Chris Rogers, managing director of Costa said: "We have been working on introducing new rates of pay and progression scales for some time now and today's announcement represents a significant investment in our teams.
"We have chosen to pay the same rates to everyone as we strongly believe that if two people are making the same contribution they should receive the same pay and that it should be linked to training and skills levels, not age.”
Costa said it invests around £3m per year on training. It is on track to deliver around 200 apprenticeship placements, train almost 3,000 baristas and create around 1,500 new jobs this year.