The company said it was the biggest in Britain by market capitalisation to guarantee to pay employees at least £7.45 an hour.
The rate is calculated on the basic cost of living in the UK and employers can choose to pay it voluntarily.
The move comes after it emerged in June that Ian Marchant, the outgoing head of SSE, who retired in the summer after a decade at the helm, had a basic salary of £870,000, up 2.5% from last year, and £1.1 million from a long-term bonus plan, as well as pension and benefits.
Two senior executives, including Alistair Phillips-Davies, who replaces Mr Marchant, almost doubled their pay.
The Perth-based firm is among energy providers who are expected to announce price rises next month. Formerly Scottish and Southern Energy, the company is the second biggest energy supplier in the UK with 10 million customers and 20,000 staff. Its last pre-tax profit was £1.4 billion.
The company said staff would now receive at least the living-wage rate, set at a level which ensures people can cover their basic cost of living including housing, bills, food and work travel. It said 148 employees in Scotland, England and Northern Ireland will benefit from a wage increase of around £1000 as a result of the decision.
It is being backdated to April. It said it would also ensure its supply chain paid employees the living wage from April 2014.
Mr Phillips-Davies said: "SSE is proud to become one of the first big companies to pay its employees the living wage.
"It is a matter of basic fairness that people should get a wage which is enough to cover their living expenses and SSE believes in being fair."
Rhys Moore, director of the Living Wage Foundation, said: "Today's announcement is a real milestone in the history of the living-wage movement.
"We now have the first energy supplier, the first UK utility and the first company in the top third of the FTSE 100 to become an accredited living-wage employer."
There are now almost 400 accredited living-wage employers in the UK, up from 70 this time last year, he said.
Deputy First Minister Nicola Sturgeon said: "We fully support the living-wage campaign - it can make a real difference to people's lives when they receive a fair wage.
"We are firmly of the view that employers should reward their staff fairly, which is why all public-sector staff under our direct control receive at least the Scottish living-wage rate and will do for the duration of this Parliament.
"It is great news that SSE have adopted the Scottish living wage and we would encourage all public, private and third-sector organisations to do likewise."
SSE organised an event yesterday to mark the occasion at its Centre for Engineering Excellence in Renewable Energy in Glasgow.
Unlike the national minimum wage, the living-wage rate is an informal benchmark, not a legally enforceable minimum level of pay.
The idea of the living wage has received widespread political support, but limited endorsement by employers to date.
Insurance giant Aviva and accountancy firm Deloitte are among the big firms which use it as a benchmark.
The living wage is now set at £8.55 an hour in London and £7.45 an hour in the rest of the UK.
By comparison, the national minimum wage is significantly lower. From October 1, 2013, the national minimum wage will be £6.31 an hour for adults, and £5.03 for those aged 18 to 21.