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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Accommodation and accommodation offset: the effect of the accommodation offset

Relevant legislation

The legislation that applies to this page is as follows:

For pay reference periods commencing

* on or after 6 April 2015; National Minimum Wage Regulations 2015, regulations 9, 10, 14(1), 15, 16 & 16(3) 
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 9, 30, 31(1)(i), 36, 36A & 37 


When the accommodation offset (NMWM10020) applies, the effect on national minimum wage pay depends on whether the employer:

  • provides the living accommodation to the worker free, or
  • makes a charge for the living accommodation (NMWM10160).

There is no limit to the amount an employer can charge a worker for accommodation, but the employer must always ensure he is paying his workers at least national minimum wage rates when the effect of the accommodation offset has been taken into account.

Employer provides Living Accommodation Free

When living accommodation is provided free of charge, a notional amount is added to the worker’s pay to calculate their national minimum wage pay. The amount is determined using the accommodation offset rate (NMWM03080). This notional amount is only used in the calculation of national minimum wage pay. It is not an actual increase in pay and the worker does not receive any more money in actual wages.

Employer charges for the Living Accommodation

When the employer charges the worker for living accommodation (NMWM10160) the charge must be taken into account by comparing it to the worker’s accommodation offset calculated using the accommodation offset rate (NMWM03080). If the charge is higher than the accommodation offset, then any excess amount above the accommodation offset will reduce the worker’s national minimum wage pay.

Summary of the Effect of the Accommodation Offset

Amount employer charges for the accommodation To calculate national minimum wage pay:
Nil The worker’s pay is increased by the notional amount of the worker’s accommodation offset (NMWM10200).
At or below the accommodation offset rate The worker’s pay is not affected by the amount charged for the accommodation (NMWM10210).
Above the accommodation offset rate The worker’s pay is reduced by the amount the employer charges in excess of the accommodation offset (NMWM10220).