NMW Buying Added Pension

Hi there, I would like to clarify the law relating to NMW and deductions from my Salary. My Work Pension Scheme allows members to buy added pension, and to do so via payroll. The scheme guidance says that I can buy pension with monthly payments, and that I can use up to 100% of my salary for this purpose. I currently purchase a small amount each month, and an amount is deducted from my salary at payroll. I have asked to increase the amount I purchase, but my payroll department says they can't legally do this, as it would take me below the NMW. I have read the guidance on calculating the NMW https://www.gov.uk/guidance/calculating-the-minimum-wage/calculating-the-minimum-wage and I believe this scenario is covered by sections "Deductions from pay and payments by workers that do not reduce minimum wage pay" and "Deductions from pay which are not connected to a worker's employment or for the employers benefit". I believe the relevant section in the NMW Manual is NMWM11180 https://www.gov.uk/hmrc-internal-manuals/national-minimum-wage-manual/nmwm11180 I believe this means that I should be able to instruct my payroll department to make these payments and they are not prohibited from doing so due to the laws for National Minimum Wage. Can you confirm whether my analysis is correct, so that I can respond to my payroll department's concerns? Many thanks.

Hi,

Unfortunately, HMRC cannot comment on this specific deduction from pay as a full understanding of the specific arrangements is necessary to determine what is considered pay for National Minimum Wage purposes.

Where a Salary Sacrifice scheme is considered, understanding all contracts and agreements in place are imperative as guidance could differ based on different scenarios. A worker cannot agree to a deduction that would reduce their pay for minimum wage purposes below the rate of minimum wage. 

However, your employer is responsible for ensuring you are paid at least the National Minimum Wage for all time worked and in order to do so they must put procedures in place to ensure this is maintained.

Your employer appears to consider this deduction to be reducing your pay for National Minimum Wage purposes and so you may benefit by speaking to them directly to understand their position.

Alternatively, if you require further assistance, please consider seeking independent advice, such as, by contacting the Advisory, Conciliation and Arbitration Service (ACAS), or an independent legal advisor.

Thank you.