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HMRC internal manual

National Minimum Wage Manual

Deductions and payments from workers - expenses

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, regulation 13
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 31(1)(g), 31(1)(h), 32(1)(a), 32(1)(b) & 34

See NMWM09170 for payments of expenses made to workers by the employer.

Any deduction or payment from the worker in respect of expenses incurred in connection with his employment will always reduce national minimum wage pay.

An expense includes any requirement imposed on the worker by the employer either contractually or otherwise. It does not include costs incurred to be in a position to do or secure the job, for example home to office fares, criminal records bureau checks (NMWM11090).

For payments made by the worker to a third party, in respect of expenses (for example petrol purchases, purchase of tools) see NMWM11170 

For example A worker is required to wear protective clothing for his employment. The clothing is supplied by the employer. His employer deducts the cost of the clothing from his pay.

The amount of the deduction reduces national minimum wage pay as it is in connection with the worker’s employment.

[See also, Uniforms (NMWM11220)]

Care must always be taken to establish the true nature of arrangements, and specifically to establish whether the amount is attributable to actual expenses incurred in connection with the employment.

Particular care should be taken where “expenses” payments are a feature of travel schemes (NMWM09175 and NMWM11110) and/or involve salary sacrifice arrangements (NMWM09300)

For general advice on how deductions and payments from workers affect national minimum wage pay, see NMWM11020 and NMWM11030 

For payments made to workers in respect of expenses, see NMWM09170