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HMRC internal manual

National Minimum Wage Manual

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HM Revenue & Customs
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Deductions and payments from workers: payments and deductions made when employment ends

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 16
* before 6 April 2015; National Minimum Wage Regulations - regulations 10(2), 31 to 37

After an employment ends, deductions can still be made from final payments paid to the worker, or the worker can make payment(s) to the employer. These deductions/payments should be considered in the normal way, see NMWM11010 and NMWM11065.

If the payment/deduction reduces national minimum wage pay, it will reduce it in the pay reference period when the deduction/payment is made.

Example 1: Final pay at end of contract

A worker in a hairdresser’s shop leaves the employment. She is paid a week in arrears and is due to be paid a final payment a week after leaving. The worker has purchased shampoo from the shop but not paid for it. The employer deducts the amount from the final pay. The deduction will reduce the calculation of national minimum wage pay since it is a deduction for the benefit of the employer (NMWM11020).

Any payments made within a calendar month of the last day of work under the contract are treated as having been made in the last pay reference period (NMWM09020).

Example 2: Payment after having left the employment

Two weeks after leaving the employment the worker is required to pay the employer for mandatory training costs.

The payment will reduce national minimum wage pay since it is an expense in connection with the employment (NMWM11100).

The payment is treated as having been made in the last pay reference period so will reduce national minimum wage pay in that pay reference period.

Any payments made more than one calendar month after the end of a contract are not covered by national minimum wage legislation.

Example 3: A worker leaves employment. Three months after leaving the employment the worker makes payment to the employer in respect of training costs.

The payment has no affect on national minimum wage pay. Payment of the amount is a matter between the worker and the employer.

Where an employer makes a payment to the worker in the final wage when the employment ends, see NMWM09200 and NMWM09205.