Working out gross pay: what counts towards the NMW?

NMW should be achieved through the basic pay rate. There will be a breach of NMW law if the NMW rate is only achieved by including hours worked at an enhanced rate, such as “overtime” or “time-and-a-half”, even if all the worker’s hours are at the enhanced rate. However, individual performance pay and contractual commission can be included as part of the basic pay rate.

Accommodation provided by the employer can be also included towards the NMW, but this can only be up to a limit of £8.20 per day (£8.36 from April 2021). This is called the accommodation offset. No other items provided by the employer (for example, uniforms, food and so on) can be included.