National minimum wage (2): calculating remuneration
A practice note that provides guidance on calculating pay for national minimum wage (NMW) compliance, focusing on the National Minimum Wage Regulations 2015 (NMW Regulations 2015). This practice note details how pay reference periods are established and outlines the rules for allocating remuneration, such as commission and bonuses, to these periods. It explores crucial distinctions between payments and benefits that count towards NMW and those that are excluded, such as certain benefits in kind and premium payments for overtime. It considers the application of the accommodation offset. Furthermore, this practice note examines the complex area of deductions and payments, clarifying which reduce a worker's pay for NMW assessment and which do not. The impact of salary sacrifice schemes and the treatment of tips under current legislation are also addressed, offering insights for employers navigating calculation of remuneration for NMW purposes.
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