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HMRC internal manual

National Minimum Wage Manual

HM Revenue & Customs
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Deductions and payments from workers: deduction from worker paid by employer to a third party on worker’s behalf.

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 12(1)
* before 6 April 2015; National Minimum Wage Regulations, regulation 32(1)(b) 

Where, at the request of a worker, an employer makes a deduction from pay and uses it to pay a third party an amount owed to them by the worker, the deduction will not reduce national minimum wage pay.

Example 1 - A worker asks their employer to deduct union fees and pay them over to their union. The deduction will not reduce national minimum wage pay (providing the membership is not a requirement of the employment).

Example 2 - A worker has an attachment of earnings order in place, requiring an employer to make a deduction from pay. The deduction does not reduce NMW pay. But note that any administration charge the employer makes will reduce NMW pay (NMWM11050)

Care must be taken to confirm that;

  1. the amount involved is the liability of the worker and not a requirement imposed by the employer, and
  2. the employer does not impose an administration charge (NMWM11050) on the worker for making the deduction.

Example 3 - a worker is charged for uniforms required for the employment which are purchased from a supplier. The employer pays the supplier in full and deducts the cost of the uniforms from the worker’s pay over a 4 week period. The deductions will reduce national minimum wage pay since the purchase of the uniform is a requirement of the job.

For employers’ administration charges, see NMWM11050.

For payments made directly to a third party by the worker, see NMWM11170.