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HMRC internal manual

National Minimum Wage Manual

National minimum wage rates: accommodation offset rate

Relevant legislation

The legislation that applies to this page is as follows:

* National Minimum Wage Regulations 2015, regulations 9, 14, 15 & 16


When an employer provides living accommodation to a worker the accommodation offset applies (NMWM10000). In these circumstances, the accommodation offset rate is used to determine national minimum wage pay. The accommodation offset rate used in the calculations is the rate that applies on the first day of the pay reference period.

For pay reference periods starting on or after 1 October 2003, the accommodation offset rate is a daily rate for each full day (midnight to midnight) that the employer makes the accommodation available. There is an overriding weekly maximum, which is seven times the daily rate.

For pay reference periods starting prior to 1 October 2003, the accommodation offset rate was either a daily rate or an hourly rate. The accommodation offset calculation was done twice - once using the daily rate and once using the hourly rate. Whichever gave the lowest result was used as the accommodation offset. Again there was an overriding weekly maximum of seven times the daily rate.

The Secretary of State for Business, Innovation & Skills (NMWM02020) is responsible for setting the accommodation offset rate and announcing the date from which any changes apply following recommendations by the Low Pay Commission (NMWM02010). The rate is not intended to reflect either the commercial value of a property or the cost to the employer of providing the accommodation. The aim is to get a balance between the value of the minimum wage to the worker and the employer’s contribution in providing the living accommodation.