The coffee shop chain said it would raise minimum hourly pay from £9.40 to £9.80, with more than 6,900 of its 8,500 staff to earn more than £10 an hour.
Many workers could also earn extra through a bonus which awards £1.25 an hour to staff if they are scored highly by a mystery shopper. Pret said 80 per cent of staff receive the bonus each week on average.
Pano Christou, CEO, said: “We’ve got big ambitions for Pret’s future, and none of it would be possible without the hard work and commitment of our people.
“We hope that this announcement goes some way to thanking them for everything they’ve done over the course of pandemic — no one deserves it more.”
Pret was one of the companies hit hardest by the coronavirus pandemic as fewer commuters and shoppers headed to town centres where many of its branches are.
The chain closed 74 locations in the UK in 2020 and shareholders injected £285m to support the struggling company.
Pret said it was now in a stronger position and sales were ”recovering strongly“.
It said the pay rise was the biggest in its 36-year history and would mean an investment of £9.2m in staff wages.
Just months ago, the company was facing off against its workers over pay cuts introduced during lockdown.
Pret stopped paying staff for their breaks and removed the mystery shopper bonus, adding up to a pay cut of as much as 11 per cent.
Staff threatened to strike in August after the bonus was brought back at 50p an hour, half what it had been.
Mr Christou raised the bonus back to £1 an hour and apologised to staff before raising wages by 5 per cent to £9.40 in September.
Pret's struggles reflect wider problems in the hospitality sector, which accounts for around 10 per cent of UK employment.
Three-quarters of hospitality firms said they were increasing pay to attract staff amid worker shortages.
Rival coffee chain Costa gave workers a 5 per cent pay rise to £9.36 an hour in September, while Asian-food chain Itsu introduced an 11 per cent rise to bring wages to a minimum of £10.40 an hour.
A survey taken in October of 200 senior executives from across the hospitality industry found that one in six jobs currently lies vacant, and 96 per cent of bosses were experiencing staffing shortages.