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HMRC internal manual

National Minimum Wage Manual

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HM Revenue & Customs
Updated
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Deductions and payments from workers: accommodation related deductions and payments

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 to 15
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 31 to 35

Special rules apply where the employer provides living accommodation to workers (NMWM10010).

If the employer does not provide living accommodation to their workers, but makes deductions from pay, or imposes a requirement to make payments to the employer in respect of accommodation or accommodation related charges, the general rules for deductions (NMWM11020) and payments (NMWM11030) will apply.

Example 1: A lorry driver sleeps inside his cab during the week when he is delivering loads. The employer is not considered to be providing living accommodation (NMWM10100) and the accommodation offset does not apply. A deduction is made by the employer in respect of the driver’s use of the employer’s fuel to run the lorry’s heating system. The full amount of that deduction will reduce national minimum wage pay as it is a charge for the use and benefit of the employer.

Pay = £300

Deduction from pay for fuel = £50

National minimum wage pay = £250

Example 2: A worker is liable to pay electricity charges to his landlord (who is not his employer) in respect of his privately rented room. At the worker’s request, the employer makes a deduction from pay and pays the bill to the landlord on the worker’s behalf. The employer is not regarded as providing the accommodation to the worker and the accommodation offset does not apply. The deduction will not reduce national minimum wage pay since it is paid to a third party on the worker’s behalf (NMWM11180). If the employer imposes an administration charge for providing this service, that charge will reduce the calculation of national minimum wage pay- see NMWM11050.

Pay = £300

Deduction from pay for electricity = £50

National minimum wage pay = £300

Example 3: A worker is required to pay his telephone provider £100 for the installation of a telephone line at home to take out of hours calls for his employer. The payment will reduce national minimum wage pay in the pay reference period in which it is made, as it is expenditure in connection with the worker’s employment (NMWM11100).

Pay = £400

Less Payment to telephone provider = £100

National minimum wage pay = £300