Working out Gross Pay

To calculate the minimum wage, you must include the following when calculating gross pay:

• All payments unless specifically excluded
• Incentive payments, including any commission
• Bonuses. Note that annual bonus payments given after they have been earned only count towards the Pay Reference Period in which they are earned.
• Accommodation, but not other benefits in kind

Accommodation

If an employer provides an employee with accommodation, they can count some of its value towards National Minimum Wage pay, known as the accommodation offset. Since 1st October 2009, the maximum amount an employer can count towards National Minimum Wage pay as an accommodation off set is £4.51 per day, or £31.57 per week. 

Calculating the accommodation offset can be complex.  Further guidance is detailed on the Directgov website and the HM Revenue and Customs website.

 Reviewed and updated by the HR Services Partnership - April 2010. 

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