Commission Workers and Minimum Wage
If you are paid wholly or partly by commission, your employer is still legally required to ensure your total pay — including any commission — meets the National Minimum Wage (NMW) for every hour you work. This applies whether you are on a commission-only contract, a base salary plus commission structure, or a zero-hours arrangement with commission incentives.
The key principle is simple: divide your total pay for the period by the hours you worked. If that effective hourly rate falls below the NMW for your age group, your employer must pay you the difference — this is called a "top-up." Failure to do so is unlawful under the National Minimum Wage Act 1998 and can result in HMRC penalties of up to 200% of arrears.
This checker calculates your effective hourly rate in real time and tells you exactly whether you are being paid lawfully — and if not, how much you are owed.
How the Pay Reference Period Works for Commission Workers
The "pay reference period" is the period of time used to calculate whether NMW has been met. For most workers paid weekly, this is one week. For workers paid monthly, it is one calendar month. Critically, employers cannot legally average commission across several months to smooth out a shortfall — compliance is assessed period by period.
Weekly example: You work 42 hours in a week. Your base pay is £0 and you earn £480 in commission. Your effective hourly rate is £480 ÷ 42 = £11.43/hr. The NLW (21+) is £12.21/hr. Your employer owes you a top-up of (£12.21 × 42) − £480 = £512.82 − £480 = £32.82 for that week.
Monthly example: You work 160 hours in a month. Your base pay is £800 and commission is £1,000, total £1,800. Effective hourly rate: £1,800 ÷ 160 = £11.25/hr. NLW shortfall: (£12.21 × 160) − £1,800 = £1,953.60 − £1,800 = £153.60 top-up owed.
Our calculator handles weekly, monthly, and 4-weekly pay periods automatically. The annual projection gives you an estimate of the annual impact if pay remains the same each period.
Worked Examples
Base pay£500
Commission£1,800
Hours worked160 hrs
Effective rate£14.38/hr
Status✓ Compliant
Base pay£500
Commission£900
Hours worked160 hrs
Effective rate£8.75/hr
Top-up owed£553.60
Base pay£0
Commission£480
Hours worked42 hrs
Effective rate£11.43/hr
Top-up owed£36.54
Did You Know?
HMRC investigated over 1,000 employers for minimum wage underpayment in 2024/25, recovering millions in arrears for workers. Commission-only roles are one of the most common sources of NMW breaches — even when total annual earnings are high, individual slow months can fall below the legal minimum.
Tips for Commission Workers
- Keep your own record of hours worked every day — don't rely solely on your employer's records
- Save every payslip and compare your total pay against hours worked each period
- Check your contract for your "pay reference period" — this determines how NMW compliance is measured
- If your employer averages commission across months to avoid top-ups, this is illegal — each period is assessed independently
- You can report underpayment anonymously to HMRC — your employer will not know who reported them
Frequently Asked Questions
Do commission-only workers get minimum wage?
Yes, absolutely. Commission-only workers are entitled to the National Minimum Wage for every hour they work. If your total commission for a pay period, divided by hours worked, falls below the NMW rate for your age group, your employer must make up the shortfall. This is a legal requirement under the National Minimum Wage Act 1998 (see
gov.uk/national-minimum-wage) and cannot be waived by any contractual term.
What is the pay reference period for commission workers?
The pay reference period is the interval between your regular pay days — typically one week or one calendar month. NMW compliance is assessed separately for each pay reference period. If you are paid monthly, HMRC checks whether your total monthly pay divided by hours worked in that month meets NMW. A strong month cannot offset a weak month.
Can my employer average commission over multiple months?
No. Under UK NMW law, employers must ensure NMW compliance within each individual pay reference period. They cannot calculate an annual average and use that to show compliance if individual months fell short. Each pay period must independently satisfy the minimum wage requirement. If your employer does this, they are likely in breach of the law.
What if I earn more than minimum wage most months but less in slow months?
Even if you earn well above NMW in busy periods, your employer is still required to top up your pay in any period where your earnings fall short. For example, if you work in sales and have a slow January, your employer must ensure your January pay still meets NMW for the hours you worked in January, regardless of what you earned in December. Keep records of your hours and payslips for every period.
How do I prove I worked enough hours to trigger a top-up?
Evidence of hours worked can include: your employment contract (if it states standard hours), rota schedules or shift records provided by your employer, emails or messages confirming working times, time-tracking software logs, and your own contemporaneous records such as a diary or phone notes. Your employer is legally required to keep NMW pay records for three years, and HMRC can demand to see them. If you raise a complaint, you can report via
gov.uk/pay-and-work-rights or call ACAS on
0300 123 1100.
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