The Charges for Residues Surveillance (Amendment) (England) Regulations 2026
The National Minimum Wage (Workplace Retirement Pension Scheme) Regulations 2005 establish the method by which employers must calculate an individual's pay when determining compliance with the National Minimum Wage, specifically detailing how statutory contributions deducted for an employee's workplace retirement pension scheme affect the final pay figure used for minimum wage assessment.
Arguments For
Ensures that employers who deduct pension contributions from an employee's pay still meet National Minimum Wage requirements, protecting the lowest-paid workers.
Provides clarity on how statutory pension contributions are treated when calculating pay for minimum wage purposes, simplifying compliance for employers offering workplace pensions.
Supports the policy objective of encouraging workplace pension saving while safeguarding the minimum income floor guaranteed by the National Minimum Wage legislation.
Arguments Against
Could potentially create administrative complexity for employers needing to track and verify statutory pension deductions against minimum wage calculations.
May discourage some low-paid employers from offering workplace pensions if the interaction with minimum wage compliance is perceived as overly burdensome.
The regulation focuses narrowly on statutory contributions, potentially overlooking similar issues arising from voluntary or non-statutory pension schemes established through collective agreements.
Citation and commencement
(1) These Regulations may be cited as the National Minimum Wage (Workplace Retirement Pension Scheme) Regulations 2005 and shall come into force on 6th April 2006.
(2) Regulation 3 applies to remuneration in respect of work done on or after 6th April 2006.
These regulations are officially named The National Minimum Wage (Workplace Retirement Pension Scheme) Regulations 2005.
They officially started on April 6, 2006.
The core rule regarding how pension contributions affect pay calculation applies only to earnings for work performed on or after that commencement date.
Interpretation
In these Regulations—
“the Act” means the National Minimum Wage Act 1998;
“employer” and “worker” have the meanings given in section 54 of the Act;
“remuneration” has the meaning given in section 11 of the Act;
“statutory pension contribution” means a contribution which an employer is required to make under section 61 of the Pensions Act 2004 in respect of a worker who is a member of a qualifying scheme;
“qualifying scheme” has the meaning given in section 64 of the Pensions Act 2004;
“qualifying scheme pension payment” means a payment made by an employer to a qualifying scheme in respect of a worker who is a member of that scheme;
This section defines key terms used throughout the regulations.
The 'Act' refers to the National Minimum Wage Act 1998. 'Employer' and 'worker' retain their meanings from that Act. 'Remuneration' also follows the definition in the Act, referring to the payment for work performed.
A 'statutory pension contribution' is specifically a contribution the employer must make under the Pensions Act 2004 for a worker in an eligible pension scheme.
Calculation of remuneration where a statutory pension contribution is made
(1) Where an employer makes a qualifying scheme pension payment in respect of a worker, the remuneration paid to that worker for the purposes of determining whether the remuneration is at or above the National Minimum Wage rate applicable to that worker, shall be deemed to be the aggregate of— (a) the amount of the remuneration before any deduction of the qualifying scheme pension payment; (b) the amount of the qualifying scheme pension payment, less (c) the amount of any deduction made under section 1(1) of the Work place Pension (Entitlement and Requirements) Regulations 2005 in respect of that payment.
(2) For the purposes of paragraph (1)(a), the “remuneration before any deduction of the qualifying scheme pension payment” is the amount which would have been remuneration in respect of the work done but for the making of the qualifying scheme pension payment.
(3) In paragraph (1)(c), “deduction” means any deduction which an employer would otherwise be entitled to make from the worker’s pay under regulation 5 of the National Minimum Wage (Computation of Remuneration) Regulations 2004.
This crucial regulation dictates how to calculate the worker's pay for National Minimum Wage compliance when the employer makes a required contribution to the worker's specific, qualifying workplace pension scheme.
The calculated pay figure is the original gross pay (before the pension contribution was subtracted), plus the actual pension contribution the employer paid out, minus any deductions the employer was allowed to take from the worker's pay according to separate 2005 regulations concerning pension entitlement.
Saving provisions
(1) Where a worker’s remuneration is calculated in accordance with regulation 3, the provisions of the National Minimum Wage (Computation of Remuneration) Regulations 2004 shall apply subject to that calculation.
(2) Regulation 4 of those Regulations shall not apply.
When an employer uses the pay calculation method described in Regulation 3 (which involves the pension contribution), the general rules established in the 2004 National Minimum Wage (Computation of Remuneration) Regulations apply, but with one key exclusion.
Specifically, Regulation 4 of the 2004 Regulations will not be used in these specific cases involving statutory pension contributions.
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