06/08/2026
The next case study. In the series … #2
A responsible employer who ensures they pay 20p above the legal minimum wage. They also provide employees with a generous staff discount scheme allowing 50% off their stock, that’s 50% off trainers, golf clubs, even electric bikes, with the option of spreading the higher priced items, (interest-free straight from your wages) … and a £464,000 business risk nobody realised.
This is one of those employers staff genuinely love. A sports retailer where everyone benefits from half-price gear, and you can pay off the big-ticket stuff over a few months with a little taken from your salary each time. What’s not to love?
Why are they staring down a £464,000 minimum wage bill?
Here’s the catch. When an employee buys goods or services from their employer and the firm takes a slice from your wages each month, that deduction is for goods the business owns, money flowing back to the employer. Under the minimum wage rules, a deduction like that reduces your pay in the month it’s taken. HMRC will review every deduction, for every worker, across the previous 6 years.
Paying above the NMW rate gives a cushion above the legal wage floor, but it’s not always enough. Knock £100 off someone’s pay for the new bike, and that month their pay can quietly slip under the minimum, repeat it across enough people, enough months … £464,000.
And here’s the bit that catches employers out, it doesn’t matter that the worker chose it, it doesn’t matter that it’s a brilliant deal, or that the firm makes nothing on it. A deduction that benefits the employer still bites the minimum wage.
That’s how a genuinely generous perk ends up as an HMRC problem. No bad intent, just a generous benefit colliding with a hard rule.
So worth asking: could your most popular staff perk be quietly pulling someone under the minimum wage, because the discount they love might be the deduction that lands you the bill.
