Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Remuneration definition

What does Remuneration mean? Remuneration is the pay an individual receives for work, typically basic salary and, depending on context, variable elements such as bonuses, commission, overtime and allowances. It is a descriptive expression used across employment, company and tax law, with its precise scope set by the relevant statute, contract, policy or scheme rules rather than by a single universal legal definition. In pensions practice—particularly defined benefit schemes—the pension accrued is usually linked to pensionable remuneration (often called pensionable salary or pay). Whether remuneration includes or excludes bonuses, commission, overtime, car or location allowances, shift premia and other fluctuating emoluments is determined by the...

Company cars, vans and car allowances: employment law treatment, tax/NICs including AMAPs and advisory fuel rates, and valuation on dismissal

Published by a LexisNexis Employment expert

Practice notes

Numerous employers offer company vehicles to particular employees as part of their Remuneration package, or pay a car or fuel allowance, in appropriate circumstances as necessary. For sample contract wording, see Precedent: Clauses—car or car allowance.

Cars and car allowances not Wages

For the purposes of the Employment Rights Act 1996 (ERA 1996), a company car does not constitute wages—a Benefit in kind counts as wages only where it is vouchers, stamps, or a document that can be expressed in monetary terms and exchanged for money, Goods or services. Accordingly, a company car is ordinarily excluded from the calculation of a week’s pay (see Practice Note: Calculating a week’s pay) and it is not safeguarded by the provisions relating to unlawful deductions from wages (see Practice Note: Deductions from wages). A car allowance does not amount to 'wages' for ERA 1996 where it simply and only reimburses an employee’s business travel costs. However, an allowance for the private use of a vehicle will be 'wages'. An employer may not set the value of a benefit in kind, such as a car or petrol, against its duty to pay the national minimum wage—see Practice Note: National minimum wage...

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Web page updated on 21/05/2026

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