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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
Updated
, see all updates

Types of work: salaried hours work

Relevant legislation

The legislation that applies to this page is as follows:

For pay reference periods commencing

* on or after 6 April 2015; National Minimum Wage Regulations 2015, regulation 21
* before 6 April 2015; National Minimum Wage Regulations 1999, regulation 4

Some workers are paid a salary by their employer. However this by itself is not sufficient to treat the person as performing salaried hours work for national minimum wage purposes. For the worker to be doing salaried hours work certain conditions must be met.

A worker is performing salaried hours work when all of the following apply:

  1. they are paid under their contract for an ascertainable basic number of hours per year (the basic Hours) (see NMWM07030),
  2. they are entitled to an annual salary for those hours (see NMWM07034),
  3. they are entitled to no other payment for the ascertainable basic hours except a performance bonus (NMWM07034 & NMWM07036),
  4. they are paid either in equal weekly or monthly instalments or by varying monthly instalments resulting in the worker being entitled to be paid in equal amounts each quarter (except for the circumstances described in NMWM07038),

These conditions are shown in a flowchart format at NMWM07025.

If the conditions for salaried hours work are satisfied it does not matter:

  • how many hours the worker actually works in a particular week or month.

    For example:

    Salaried hours work can include circumstances when workers work for only part of the year (such as term time workers) as long as they are paid in equal weekly/monthly payments throughout the year and the other conditions are satisfied.

  • whether or not all the basic annual hours are working hours

    For example:

    Some of the ascertainable basic hours might be paid holiday.

  • whether or not the worker can be required under his contract to work, or does in fact work, extra hours in addition to the basic annual hours for which he gets his annual salary and whether he is paid for those extra hours

    For example:

    A worker performing salaried hours work may still work further hours as paid or unpaid overtime in addition to his basic annual hours which are paid under his contract by salary.