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Now In: Pay and benefits > National minimum wage
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Is an employer at liberty to determine its own levels of pay?

Who is eligible for the national minimum wage?

What is the current rate for the national minimum wage?

How should employers calculate the amount payable under the national minimum wage?

Can benefits in kind count towards the national minimum wage?

Is it permissible for a salary sacrifice arrangement to reduce an employee's pay to below the level of the national minimum wage?

No. A salary sacrifice occurs when an employee gives up the right to receive part of the wages due under his or her contract of employment. Usually, the sacrifice is made in return for the employer's agreement to provide the employee with some form of non-cash benefit in kind, such as childcare vouchers, an employer-provided nursery place or permanent health insurance. The sacrifice is achieved by varying the employee's terms and conditions of employment relating to pay. A salary sacrifice arrangement must not, however, reduce an employee's wages to below the level of the national minimum wage. This is because, apart from living accommodation (for which there is a daily offset), non-cash benefits in kind that are provided instead of wages do not count towards the minimum wage (National Minimum Wage Regulations 1999, regulation 9). It makes no difference whether or not the benefit is taxable.

Thus, the value or notional value of benefits such as meals, luncheon vouchers, medical insurance, permanent health insurance, childcare vouchers and other childcare benefits cannot be counted towards minimum wage pay even where the benefit has been provided under a salary sacrifice arrangement.

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Where sales people are employed on a commission-only basis, is their employer obliged to pay the national minimum wage if their commission over a period falls below this?

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What rate of the national minimum wage is payable when 1 October 2009 falls within a worker's pay reference period?

What is the rate of the national minimum wage from 1 October 2009?

Can employers use tips to count towards payment of the national minimum wage?

Under the 1 October 2009 changes to the national minimum wage legislation are employers obliged to pass on the full value of all tips to employees?