National Minimum Wage – don’t fall foul of common errors

National Minimum Wage (NMW) regulations are complex and not intuitive.

Errors in the administration of the rules can be expensive. They can also cause damage to the reputation of your business as HMRC publicly names and shames businesses in default.

Particular Points to be aware of:

  • Not paying for all working hours – Travel time from work to a job is part of the business day, so must be counted when calculating the NMW, and travel from home to work is not counted. If the worker is required to be at work early to set up, or attend a meeting or training, then this is part of the working day.
  • Deduction or payment for rent – A worker can pay rent to the employer. If the rent is greater than the “accommodation allowance” the excess is included when the NMW calculation is made.
  • Deductions from wages – Employers can legally make deductions for items such as uniforms. However, the employee must still receive the NMW after the deduction has been made.
  • Deductions for Christmas Party – In more normal times, a deduction for the costs of the Christmas Party from the wages of the worker must not cause the income to reduce below the NMW
  • Don’t include tips – Tips do not count towards the calculation of the NMW.
  • Missing Birthdays – The NMW rates are based on the age of the worker. The employer must ensure that the correct hourly rate is paid to the worker.

To find the current National Minimum Wage and National Living Wage rates, head to: 

If you have any questions about minimum wage rates and would like to discuss the subject further you can call us on 01243 782 423 or head to our contact page and they will be in touch!