Written for portfolio landlords, letting and managing agents, HMO operators and short-let operators in England, Wales, Scotland and Northern Ireland.
The short version
- Work out each person's floor for the month.Hours worked times their minimum wage rate. For example, 40 hours a week is about 173 hours a month.
- Top up any month that falls short.Each pay period is tested on its own, not the year's average. An unpaid top-up is arrears HMRC can recover, with a penalty.
- Change commission terms only by agreement.Pay commission on fee income received. Retire renewal commission with notice and consultation, after advice from an employment solicitor.
Lettings agencies have long paid negotiators and property managers a low basic salary topped up with commission. That works in a busy month. In a quiet month the total can fall below the minimum wage for the hours worked, and the shortfall becomes a debt the agency owes.
The test runs pay period by pay period, not over the year: pay must be at or above the National Minimum Wage for every hour, averaged over each pay reference period. The National Living Wage for workers aged 21 and over is £12.71 an hour from 1 April 2026. An unpaid top-up is arrears HMRC can recover, with a penalty. As of Oct 2026.
| Basic pay | £1,400 |
| Commission in a quiet month | £500 |
| Pay for the month | £1,900 |
| Top-up the agency must pay that month | £303.07 |
£2,203.07 floor (40 x 52 / 12 hours x £12.71) - £1,900That is 173.33 hours a month. In a month with £1,100 of commission (£2,500 in all) she is above the floor. Model the worst month, not the average.
Retiring renewal commission
With no fixed terms in England since 1 May 2026, commission tied to renewals has no renewal events left to pay on. Pay commission on fee income received, not rent agreed, and claw back only if the contract says so. Retire renewal-based commission with notice and consultation, because changing contractual pay without agreement is a breach. Take advice from an employment solicitor before you change the terms.
Contractors and lone working
- Use Gas Safe registered engineers for gas work, and check the work categories on their card.
- Use electricians in a competent person scheme for electrical reports, and keep each certificate against its property.
- A "self-employed" handyman working set hours for one agency may be a worker or employee under the usual control and substitution tests.
- Lone viewings and inspections of empty properties need a risk assessment, a logged check-in routine and verification of applicants (Health and Safety at Work etc. Act 1974).
- Employers' liability insurance is compulsory once you have employees.
The minimum wage is averaged over each pay reference period, not the year, so one quiet month creates arrears.
No qualification is required by law to work as a letting agent in England, because regulation of property agents is still a proposal. Propertymark requires qualifications of its members, and Rent Smart Wales requires approved training for a licence.
Asked in Greymill
Hours: 40 a week is about 173.33 a month
Floor at £12.71 an hour: £2,203.07 a month
Average month: £1,400 + £1,000 = £2,400, above the floor
Quiet month: £1,400 + £500 = £1,900, so £303.07 short
£12.71 is the National Living Wage for workers aged 21 and over, from 1 April 2026 (As of Oct 2026).
Why the year doesn't help: the test runs pay period by pay period, not across the year. Leave a top-up unpaid and HMRC can recover the arrears, with a penalty.
So plan pay around the worst month, not the average. Ready for a commission plan paid on fee income received, with a monthly floor check built in?
Ask it about your own business
Paste this into Greymill with your own figures, and Staff & HR works it through for your business.
I run a property management business in the UK. I employ [number] negotiators and property managers on [basic salary] plus commission on [what it is paid on], working [hours] a week, aged [ages]. Check each role's worst recent month against the minimum wage floor, show any top-up we owe, and draft a new commission plan paid on fee income received, with a consultation plan for retiring renewal commission.
More for property management and rentals in the UK
- Our renewal commission has gone: how do we replace it?Since 1 May 2026 English tenancies have no fixed term to renew, so renewal-based fees may stop and the gap has to be priced openly to landlords.Read the lesson
- My fixed rate ends next year: will the rent still cover the mortgage?A buy-to-let refinance can double the interest bill and has to pass the lender's rent cover test, so plan it months ahead inside a 13-week cash view.Read the lesson
- Section 24 is eating my rental profit: should the properties go into a company?Individual landlords get only a basic-rate credit for mortgage interest, but moving a portfolio into a company can cost more up front than it saves in decades.Read the lesson
- Is every property legal to let? Certificates, alarms, Right to Rent and HMO licencesCostly lettings mistakes are often a missed certificate, check or licence, so run one compliance tracker per property and clear the move-in items first.Read the lesson
- Our tenancy and management agreements were written for fixed termsSince 1 May 2026 several clauses English agreements still carry have no effect and some break the Tenant Fees Act, so check the paperwork before you sign or rely on it.Read the lesson
- Winning landlords when there are no renewals left to sellLandlords now buy compliance, lawful arrears handling and evidenced rent reviews, and every advert you run for them has to meet consumer law.Read the lesson
- A tenant has stopped paying: what to do first, nation by nationArrears cases are lost on a missed step, so check the deposit and certificates, log the arrears, and use the right ground for the nation the property is in.Read the lesson
Open the interactive lesson · Every property management and rentals lesson · What Greymill knows about the trade
Sources
The primary sources behind this lesson, checked Oct 2026.
- National Minimum Wage Regulations 2015 regs 7, 9, 10 (People: agency roles, qualifications)
- ERA 1996 s13 (deductions) (People: agency roles, qualifications)
- s19 (People: agency roles, qualifications)
- reg 3(3) (People: agency roles, qualifications)
- s1 (People: agency roles, qualifications)
- regs 3, 4 (People: agency roles, qualifications)