http://www.legislation.gov.uk/uksi/2015/621/part/5/chapter/2The National Minimum Wage Regulations 2015enTERMS AND CONDITIONS OF EMPLOYMENTStatute Law Database2025-07-03Expert Participation2025-04-01 These Regulations remake the National Minimum Wage Regulations 1999 (S.I. 1999/584) and consolidate the amendments made to those Regulations. The National Minimum Wage Regulations 2015 PART 5 CHAPTER 2 211“Salaried hours work” is work which is done under a worker’s contract and which meets the conditions in paragraphs (2) to (5) of this regulation.2The first condition is that the worker is entitled under their contract to be paid—aan annual salary; orban annual salary and one or both of—ia performance bonus; andiia salary premium.3The second condition is that the worker is entitled under their contract to be paid that salary or salary and performance bonus or salary premium (or all three) in respect of a number of hours in a year, whether those hours are specified in or ascertained in accordance with their contract (“the basic hours”).4The third condition is that the worker is not entitled under their contract to a payment in respect of the basic hours other than—aan annual salary; orban annual salary and one or both of—ia performance bonus; andiia salary premium.5The fourth condition is that the worker is entitled under their contract to be paid, where practicable and regardless of the number of hours actually worked in a particular week, month or other period, in instalments which—aare equal and occur not more often than weekly and not less often than monthly; orboccur monthly and vary but have the result that the worker is entitled to be paid an equal amount in each quarter.6Circumstances where it may not be practicable to pay a worker by equal instalments, or by an equal amount in each quarter, include where—aa performance bonus is awarded;aaa salary premium is paid;bthe annual salary is varied;ca payment is made in respect of hours in addition to basic hours; ordthe employment starts or terminates during a week, month or other period provided for in paragraph (5)(a) with the result that the worker is paid a proportionate amount of their annual salary for that week, month or other period.7Work may be salaried hours work whether or not—aall the basic hours are working hours;bthe worker works hours in excess of the basic hours (whether the worker is entitled to be paid for those additional hours or not);cthe annual salary may be reduced due to an absence from work.8A “performance bonus” is a payment paid to a worker on merit attributable to the quality or amount of work done in the course of more than one pay reference period.9A “salary premium” is—aan amount of pay which is—iin addition to the annual salary; oriian increase in the rate of pay for particular working hours;bin respect of the basic hours; andcattributable to working—iat a particular time of the day;iion a particular day;iiiat a particular location;ivin a particular working environment;vwithin a particular geographical area;vion a particular task; orviisubject to a particular responsibility. 221The hours of salaried hours work in a pay reference period are to be calculated in accordance with the following paragraphs.2Where the pay reference period is a week, the hours of salaried hours work in that period are the basic hours divided by 52.2AWhere the pay reference period is two weeks, the hours of salaried hours work in that period are the basic hours divided by 26.2BWhere the pay reference period is four weeks, the hours of salaried hours work in that period are the basic hours divided by 13.3Where the pay reference period is a month, the hours of salaried hours work in that period are the basic hours divided by 12.4Where the pay reference period is any other period, the hours of salaried hours work in that period are the basic hours divided by the figure obtained by dividing 365 by the number of days in the pay reference period.5The basic hours are to be ascertained in accordance with the worker’s contract on the first day of the pay reference period in question unless paragraphs (6) or (7) apply.6The hours of salaried hours work in a pay reference period are to be ascertained in accordance with regulations 24 to 28 if the worker—aduring or before the payment reference period, works additional hours in excess of the basic hours in the calculation year, andbis not entitled to be paid more than annual salary, a performance bonus and a salary premium for those additional hours.7The hours of salaried hours work in a pay reference period are to be determined in accordance with regulation 29 if—athe employment terminates before the end of the calculation year;bthe contract is varied before the end of the calculation year so that it is no longer a contract for salaried hours work; orcthe calculation year is changed by the employer as provided for in regulation 24(5) to (8). 23 1 The hours a worker is absent from work are to be subtracted from the hours of salaried hours work in a pay reference period if all of the following conditions are met— a the employer is entitled under the worker’s contract to reduce the annual salary due to the absence; b the employer pays the worker less than the normal proportion of annual salary in the pay reference period as a result of the absence. 2 The hours during which a worker takes industrial action are to be subtracted from the hours of salaried hours work in a pay reference period if an annual salary was payable for those hours, or would have been payable but for the industrial action. 241In this Chapter, “the calculation year” has the meaning given in the following paragraphs.1AParagraphs (2) to (4) apply unless an alternative calculation year takes effect in accordance with paragraphs (5) to (8).2For a worker who commenced the employment before 1st April 1999, then for so long as the worker continues in that employment the calculation year is a year beginning on an anniversary of the commencement of that employment.3For a worker whose annual salary is payable monthly and who commenced the employment after 31st March 1999, then for so long as the worker continues in that employment—aif the worker commenced employment on the first day of a month, the calculation year is—ithe year beginning with that day;iiin each subsequent year, a year beginning on an anniversary of that day;bif the worker commenced employment on any other day of a month, the calculation year is—ithe period beginning with that day and ending with the day before the first anniversary of the first day of the next month;iiin each subsequent year, a year beginning on an anniversary of the first day of that month.4For a worker whose annual salary is payable other than monthly and who commenced the employment after 31st March 1999, then for so long as the worker continues in that employment the calculation year is—athe year beginning with the first day of employment;bin each subsequent year, a year beginning on an anniversary of that day.5Where the requirements specified in paragraph (6) are met (subject to the exception in paragraph (7)), the employer may change a worker’s calculation year by specifying an alternative calculation year in a written notice given to the worker.6The requirements referred to in paragraph (5) are that—athe notice includes an explanation of the effect of the change of the calculation year;bthe alternative calculation year does not begin within the period of three months beginning with the day on which the employer gave the notice;cthe worker does not, before the day on which the notice specifies that the alternative calculation year begins, give the employer a written objection to the change;da change to the worker’s calculation year has not already taken effect within the period of six years ending with the day on which the notice specifies that the alternative calculation year begins; andethe employer does not make any deduction or require the worker to make any payment or work any additional hours as a result of the change.7The requirements set out in paragraph (6)(a) to (d) do not apply where on the day on which the notice specifies that the alternative calculation year begins the worker has been employed for less than the period of three months ending with that day.8Where in accordance with paragraphs (5) to (7) the employer specifies an alternative calculation year—athe change takes effect on the day the alternative calculation year begins; andbin each subsequent year, the calculation year is a year beginning on an anniversary of that day.9Where a worker’s calculation year is changed as provided for in paragraphs (5) to (8), regulation 29 is to apply as if the employment of the worker had been terminated and the last day of the worker’s final pay reference period had fallen on the day before the day on which the new calculation year begins. 25 1 In this Chapter, the basic hours in a calculation year are determined in accordance with the following paragraphs. 2 The basic hours in the calculation year are the basic hours ascertained in accordance with the contract at the start of the calculation year, unless there is a variation to the basic hours which takes effect in the calculation year. 3 Where a variation to the basic hours takes effect in the calculation year, the basic hours in the calculation year are determined by adding together— a the proportion of basic hours in the calculation year in the period starting before the day during which the variation takes effect, and b the proportion of basic hours in the calculation year in the period after the day during which the variation takes effect until the end of the calculation year. 4 If more than one contractual variation takes effect in the calculation year, the “basic hours in the calculation year” are determined by adding together— a the proportion of basic hours in the calculation year in the period starting before the day during which the first variation takes effect, and b for each variation, the proportion of basic hours in the calculation year in the period after the day during which the variation takes effect and before the day during which the next variation takes effect or, in the case of the final variation, the end of the calculation year. 5 The proportion of basic hours in the calculation year for each of the periods in paragraphs (3) and (4) is calculated using the formula— $$\left(\frac{D}{365}\right)\times H$$ where— “D” means the number of days in the period; “H” means the basic hours in the calculation year which have effect in that period. 261For the purposes of this regulation and regulations 22(6) and 28, a worker works more than the basic hours in a calculation year if all of the following hours added together are more than the basic hours in a calculation year—ahours worked which form part of the basic hours in the calculation year;bhours when the worker was absent from work which form part of the basic hours in the calculation year;chours worked in the calculation year which do not form part of the basic hours in the calculation year in respect of which the worker had no entitlement under their contract to a payment other than annual salary or annual salary and a performance bonus or salary premium (or all three);dhours treated as worked in accordance with regulation 27 to the extent that such hours consist of hours in respect of which the worker had no entitlement under their contract to a payment other than annual salary or annual salary and a performance bonus or salary premium (or all three).2Hours during which the worker was taking part in industrial action are not to be included in sub-paragraphs (a) to (d). 27 1 The hours listed in sub-paragraphs (a) to (c) are treated as worked for the purposes of determining whether the worker works more than the basic hours in the calculation year (in accordance with regulation 26(1)(d)) and, where the worker does, the number of hours of salaried hours work in that year (in accordance with regulation 28)— a hours a worker spends training when the worker would otherwise be working; b hours a worker is available at or near a place of work for the purposes of working, unless the worker is at home; c hours a worker spends travelling for the purposes of working, when the worker would otherwise be working, unless the travelling is between— i the worker’s home, or a place where the worker is temporarily residing other than for the purposes of working, and ii a place of work or a place where an assignment is carried out. 2 In paragraph (1)(b), hours when a worker is available only includes hours when the worker is awake for the purposes of working, even if a worker is required to sleep at or near a place of work and the employer provides suitable facilities for sleeping. 3 In paragraph (1)(c), hours treated as hours when the worker would otherwise be working include— a hours when the worker is travelling for the purpose of carrying out assignments to be carried out at different places between which the worker is obliged to travel, and which are not places occupied by the employer; b hours when the worker is travelling where it is uncertain whether the worker would otherwise be working because the worker’s hours of work vary either as to their length or in respect of the time at which they are performed. 28 1 If, in a pay reference period, a worker has worked more than the basic hours in the calculation year, the hours of salaried hours work in that pay reference period are calculated by adding together all of the following hours— a the proportion of basic hours attributable to the part of the pay reference period starting before the day during which the worker worked more than the basic hours in the calculation year; b the proportion of basic hours attributable to the part of the pay reference period starting on the day during which the worker worked more than the basic hours in the calculation year; c the number of hours actually worked in the pay reference period starting on the day during which the worker worked more than the basic hours in the calculation year; d the number of hours treated as worked, in accordance with regulation 27, in the pay reference period starting on the day during which the worker worked more than the basic hours in the calculation year. 2 In paragraph (1)(a) and (b), each proportion of basic hours in the pay reference period is calculated using the formula— $$\left(\frac{D}{365}\right)\times H$$ where— “D” means the number of days in the part of the pay reference period referred to in paragraph (1)(a) or (b); “H” means the basic hours in the calculation year. 3 Reductions from the basic hours in the calculation year for absences, in accordance with regulation 23, must only be made from the proportion of basic hours determined under paragraph (1)(a). 4 For each pay reference period in the calculation year after the pay reference period in which the worker worked more than the basic hours, the number of hours of salaried hours work are calculated by adding together all of the following hours— a the number of hours of salaried hours work in the pay reference period determined in accordance with regulation 22(2) to (4); b the number of hours actually worked in the pay reference period; c the number of hours treated as worked in the pay reference period in accordance with regulation 27. 5 Regulation 23 (absences from work to be reduced from the hours of salaried hours work in a pay reference period) does not apply to the calculation in paragraph (4)(a). 29 1 Where the employment terminates before the end of a calculation year the hours of salaried hours work in the final pay reference period are calculated in accordance with the following paragraphs. 2 Where the worker does not work more than basic hours in the calculation year, the hours of salaried hours work in the final pay reference period are the sum of the following— a the number of hours of salaried hours work in the pay reference period calculated in accordance with regulation 22(2) to (4), and b the number of hours (if any) by which A exceeds B where— “A” is the number of hours determined in accordance with regulation 26; and “B” is the total of the number of hours of salaried hours work determined in accordance with regulation 22(2) to (4) in respect of all pay reference periods (including the final pay reference period) since the beginning of the calculation year. 3 Where the worker works more than the basic hours in the calculation year, the hours of salaried hours work in the final pay reference period are the sum of the following— a the number of hours determined in accordance with regulation 28, and b the number of hours of salaried hours work calculated in accordance with regulation 22(2) to (4) for the period beginning on the day following the last day of the final pay reference period and ending at the end of the calculation year as if— i it was a single pay reference period (containing that number of days), and ii the worker had remained employed until the end of the calculation year without any absences. 4 If a contract for salaried hours work is varied with the effect that it is no longer a contract for salaried hours work, this regulation is to apply as if the employment of the worker had been terminated and the last day of the worker’s final pay reference period had fallen on the day before the day on which the variation took effect.

Reg. 21 in force at 6.4.2015, see reg. 1Reg. 22 in force at 6.4.2015, see reg. 1Reg. 23 in force at 6.4.2015, see reg. 1Reg. 24 in force at 6.4.2015, see reg. 1Reg. 25 in force at 6.4.2015, see reg. 1Reg. 26 in force at 6.4.2015, see reg. 1Reg. 27 in force at 6.4.2015, see reg. 1Reg. 28 in force at 6.4.2015, see reg. 1Reg. 29 in force at 6.4.2015, see reg. 1Reg. 21(9) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 5(f) (with regs. 11-16)Reg. 21(2) substituted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 5(a) (with regs. 11-16)Words in reg. 21(3) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 5(b) (with regs. 11-16)Reg. 21(4) substituted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 5(c) (with regs. 11-16)Reg. 21(5) substituted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 5(d) (with regs. 11-16)Reg. 21(6)(aa) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 5(e)(i) (with regs. 11-16)Reg. 21(6)(d) substituted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 5(e)(ii) (with regs. 11-16)Reg. 22(2A)(2B) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 6(a) (with regs. 11-16)Reg. 22(6)(b) substituted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 6(b) (with regs. 11-16)Reg. 22(7) substituted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 6(c) (with regs. 11-16)Reg. 24(1A) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 7(a) (with regs. 11-16)Reg. 24(5)-(9) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 7(c) (with regs. 11-16)Words in reg. 24(4) substituted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 7(b) (with regs. 11-16)Words in reg. 26(1)(c) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 8 (with regs. 11-16)Words in reg. 26(1)(d) inserted (6.4.2020) by The National Minimum Wage (Amendment) (No. 2) Regulations 2020 (S.I. 2020/339), regs. 1, 8 (with regs. 11-16)