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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:

* National Minimum Wage Regulations 2015, regulations 7 & 9 to 16


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).