Legal News | 31.05.23
Accommodation Offset – Employers Providing Accommodation to Workers or Employees
If you provide accommodation to your employees, you may be able to set off a certain amount for the cost of providing the accommodation against the wages paid, for the purpose of calculating National Minimum Wage or National Living Wage. The accommodation offset rate is currently £9.10 per day.
The accommodation offset is available when an employer is “regarded as responsible for the provision of accommodation to the worker” and the accommodation provided is “living accommodation.” There are various instances in which an employer may be regarded as responsible for the provision of accommodation. The more obvious ones are when the employer is the worker’s landlord, or when the employer and the landlord are part of the same group of companies. However, this requirement may be satisfied in less evident instances, for example, where the employer and the landlord have a director in common.
How much accommodation offset can be applied?
The starting point for calculating the amount that can be offset against the employee’s or worker’s wage is the applicable rate (£9.10 per day from 1 April 2023) and the number of days in the employee’s pay period for which the accommodation is provided. However, the calculation varies based on whether the accommodation is provided for free, for a charge that is lower than the offset rate, or for a charge that is greater than the offset rate. When the accommodation is provided for free, the employee’s or worker’s accommodation offset is added to their pay. If the charge for the accommodation is lower than the offset rate the employee’s pay remains unaffected and if higher, their pay is calculated to take account of this and will be reduced. It is important to get the calculation right. If incorrect, the employee or worker may have a claim against their employer for failure to pay National Minimum Wage.
The above also applies to workers who are not employees but also not sufficiently independent to be considered self-employed, by reason of which are entitled to certain employment rights. If you would like more specific advice on whether you could apply accommodation offset or if you have any other queries, then please get in touch with your usual contact at Wansbroughs or email firstname.lastname@example.org.