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HMRC internal manual

National Minimum Wage Manual

Pay reference periods & elements of pay - allowances - effect on national minimum wage pay

Relevant legislation

The legislation that applies to this page is as follows:

National Minimum Wage Regulations 2015, regulation 10(k)

An allowance paid by the employer to the worker initially counts towards a worker’s total remuneration, unless it is an allowance made in connection with the worker’s retirement or as compensation for loss of office (NMWM09060).

If the payment is an allowance for national minimum wage purposes (NMWM09090) then the amount of the allowance is then reduced from the worker’s total remuneration.