NMWM09280 - Pay reference periods and elements of pay: premium rates of pay including shift premia: output work

Relevant legislation

The legislation that applies to this page is as follows:

  • National Minimum Wage Regulations 2015, regulation 10(j)

The principle of the National Minimum Wage Regulations is that a worker’s basic minimum wage pay, before enhancement or other allowances (NMWM09090), should not fall below the statutory National Minimum Wage. For time workers see (NMWM09270)

Adjustments must be made to the calculation of National Minimum Wage pay where payments are made to output workers, which are:

  • in respect of particular duties, and
  • are made at a higher rate than the normal rate
  • because the work is done at a particular time or in particular circumstances.

Where this is the case, the full amount paid is initially included in a worker’s total remuneration, but the value of the premium rate element of the pay is then reduced from the worker’s National Minimum Wage pay. This means that the money payments in respect of the same work paid at the premium rate, reduces the worker’s total National Minimum Wage pay by the amount by which they exceed the normal rate for performing those duties.

For example: A worker is paid £10.00 per pot produced.

He is asked to produce some pots in a tent during a weekend craft fair and is paid £15.00 per pot.

The premium element of the rate is £15.00 - £10.00 = £5.00. His total remuneration includes the full amount of the rate, but his National Minimum Wage pay will be reduced by the amount paid over and above the lowest rate for the job.