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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Pay reference periods & elements of pay: dividends

Dividends are not included in the calculation of a worker’s total remuneration (NMWM09050) and therefore do not count towards national minimum wage pay (NMWM09040). This is because they are not payments made in the worker’s capacity as a worker, rather they are payments linked to a shareholding.

Shareholders can also be workers or office holders (NMWM06240)

As with all payments it is important to consider the nature of the payment and verify whether a payment described as a dividend is actually a dividend. For example some shareholdings may not qualify for a payment of dividends. Employers should be asked to explain the nature and provenance of any payments labelled “dividends” in order to consider how the payments should be considered for national minimum wage purposes.