Wages Act 1986

17 Computation of remuneration. E+W+S

(1) For the purpose of determining, for the purposes of this Part, the amount of remuneration paid to a time worker by his employer in respect of time worked by the worker in any week there shall be added together—

(a) the total amount of any money payments made by the employer to the worker, on or before the relevant pay day, by way of remuneration in respect of time worked by him in that week, and

(b) the total amount of any deductions made by the employer (whether in accordance with Part I or not) when making the payment of wages which consisted of or included those money payments, apart from deductions falling to be left out of account under this paragraph by virtue of subsection (2),

and then, from the aggregate of those amounts, there shall be subtracted the aggregate of—

(i) the worker’s necessary expenditure in connection with his employment to the extent that such expenditure consists of payments to persons other than the employer, is attributable to that week and is not met, or designed to be met, by an allowance paid to him by the employer, and

(ii) the total amount of any payments received from the worker by the employer (whether in accordance with Part I or not) and falling to be taken into account under this paragraph by virtue of subsection (3).

(2) The following deductions shall be left out of account under subsection (1)(b), namely—

(a) any deduction in respect of the worker’s necessary expenditure in connection with his employment to the extent that the deduction is attributable to the week in question;

(b) any deduction in respect of the provision of living accommodation for the worker by the employer to the extent that the deduction exceeds any limit for the time being in force in relation to the worker by virtue of section 14(1)(c), and

(c) subject to subsection (4), any other deduction made by the employer for his own use and benefit (and accordingly not attributable to any amount paid or payable by him to any other person, or to any authority, on behalf of the worker).

(3) The following payments by the worker shall be taken into account under subsection (1)(ii), namely—

(a) any payment in respect of the worker’s necessary expenditure in connection with his employment to the extent that the payment is attributable to the week in question;

(b) any payment due from the worker in that week in respect of the provision of living accommodation for him by the employer to the extent that the payment exceeds any limit for the time being in force in relation to the worker by virtue of section 14(1)(c), and

(c) subject to subsection (4), any other payment due from the worker in that week and retained by the employer for his own use and benefit (and accordingly not attributable to any amount paid or payable by him to any other person, or to any authority, on behalf of the worker).

(4) Subsections (2)(c) and (3)(c) do not apply—

(a) to deductions made or payments received by the employer on account of any of the following matters, namely—

(i) any conduct of the worker or any other event in respect of which he (whether together with any other workers or not) has any contractual liability,

(ii) any advance under an agreement for a loan or any advance of wages, or

(iii) the purchase by the worker of any shares or other securities or of any share in a partnership; or

(b) to deductions made or payments received by the employer on account of any goods or services supplied by the employer with the worker’s prior agreement or consent to the extent that any such deductions or payments do not result in the employer recovering from the worker an amount exceeding the cost to the employer of supplying the goods or services in question;

and accordingly any such deductions shall not be left out of account under subsection (1)(b) and any such payments shall not be taken into account under subsection (1)(ii).

(5) For the purposes of subsection (4)(b) the cost to an employer of supplying any goods or services shall—

(a) where he supplies goods or services of the kind in question in the course of his business, be taken to be the amount which he would have obtained for the goods or services if they had been supplied in the course of that business; and

(b) in any other case, be taken to be the amount of expenditure incurred by the employer in connection with the supply by him of the goods or services.

(6) The preceding provisions of this section shall apply to a piece worker as they apply to a time worker but as if, in subsection (1), any reference to remuneration in respect of time worked by the worker in any week were a reference to remuneration in respect of—

(a) work executed by him in any week, and

(b) any such time as is mentioned in section 15(4) that occurs during the week.

(7) In this section—

• “deduction” does not include any such deficiency in the payment of wages as is mentioned in section 8(3);

• “money payment” means—

  (a)

  a payment in cash,

  (b)

  a payment by cheque or by a money or postal order issued by the Post Office, or

  (c)

  a payment (however effected) into any account kept with a bank or other institution;

• “relevant pay day”, in relation to any week of a worker’s employment, means the day on which his remuneration in respect of that week is payable;

• “wages” has the same meaning as in Part I.