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HMRC internal manual

National Minimum Wage Manual

Pay reference periods and elements of pay: the concept of national minimum wage pay

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, regulations 7 & 9 to 16
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 14 & 30 to 37

The value of a worker’s national minimum wage pay is defined by national minimum wage legislation and is calculated by:

  1. determining a worker’s total remuneration in a pay reference period (NMWM09050), including:
* any addition for living accommodation provided free of charge by the employer ([NMWM10030]( 

but not including

* amounts that do not count towards national minimum wage pay ([NMWM09070]( and then
  1. reducing that amount as required, to take account of:
* deductions made from pay or payments made by the worker to the employer which are required to be reduced from the total remuneration. ([NMWM11020]( 

National minimum wage pay is not the same as gross pay, taxable pay, NICable pay or net pay. For guidance on:

  • the calculation of national minimum wage pay where net pay arrangements are in place see (NMWM09220)
  • the effect of deductions for tax on national minimum wage pay - see (NMWM11210).