Living wages are paid

How to calculate accommodation offset

If a worker is charged more than £31.22 a week for their accommodation, the minimum wage payable is increased by the difference.

For example: if a worker who is paid the minimum wage is charged £40 per week the worker’s wage would have to be increased by £40 - £31.22 = £8.78 (this is applicable to the NMW and AWO in England and Wales).

The BERR provides guidance in the following format:

A worker is paid £6.00 per hour, and works 40 hours per week (gross pay of £240).

They are charged £75 per week for rent.

The amount charged in excess of the offset (£75 - £31.22) is £43.78.

Subtract the excess charge from the gross pay to calculate how much they earn per week (£240 - £43.78 = £196.22).

Use this figure to calculate the hourly pay (£196.22 / 40 = £4.91 per hour).

The worker is therefore being paid 82p less per hour that they should be. The employer should therefore increase the amount that they are paid to £6.82 per hour, or decrease the accommodation charge.