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HMRC internal manual

National Minimum Wage Manual

Pay reference periods & elements of pay: national minimum wage pay - payments from the employer to the worker which count as remuneration

Relevant legislation

The legislation that applies to this page is as follows:

* National Minimum Wage Act 1998, section 55
* National Minimum Wage Regulations 2015, regulations 3, 9, 9(1) & 10(a)-(e), 10, & 16


For national minimum wage purposes, payments paid by the employer to the worker mean:

    1. actual money payments
      1. paid by the employer
      2. to the worker (NMWM05020).
      3. in his capacity as a worker
      4. before any deductions are made.

If a payment satisfies the conditions shown above, it can count towards the worker’s total remuneration for the pay reference period (NMWM09050).

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Amounts which do not count towards national minimum wage pay

Payments for national minimum wage purposes do not include any:

  • payment of an advance made under an agreement for a loan or by way of an advance of wages (NMWM09210)
  • payment by way of a pension, an allowance or gratuity in connection with the worker’s retirement or as compensation for loss of office (NMWM09200)
  • payment of an award made by a court or tribunal (or to settle proceedings which have or might have been brought before a court or tribunal) unless it is a payment due under the worker’s contract (NMWM09120)
  • payment related to a worker’s redundancy (NMWM09290)
  • payment by way of an award under a staff suggestion scheme (NMWM09330)
  • benefits in kind (whether or not they have a monetary value) except amounts treated as payments for living accommodation in certain circumstances (NMWM10000)
  • vouchers, stamps or similar documents which can be exchanged for money, goods or services provided by the employer to the worker (NMWM09350).
  • payments in respect of arrears of NMW. These are payments deriving from a statutory right and not the worker’s contract.
  • repayments of income tax &/or national insurance contributions.

These must be ignored when calculating a worker’s total remuneration for national minimum wage purposes.