Payment in kind

Prohibiting the deduction of payments in kind from the minimum wage

In practice, while most countries allow payments in kind as part of the wage, many countries do not allow such payments to count as part of the minimum wage. In this approach, the minimum wage must be paid completely in cash, and payments in-kind can only be used as part of wages that are greater than the minimum wage.1

This is the case in Antigua and Barbuda, Argentina, the Bahamas, Chile, Islamic Republic of Iran, Kenya, Mexico, Panama and Romania.2 It is also the case in Spain, where the legislation allows for the inclusion in the wage of payments in kind up to 30 per cent, but prohibits it as part of the minimum wage.3 In Italy, while payments in kind are excluded from the calculation of the minimum wage, they can be granted in addition to the minimum wage.4 This approach ensures that domestic workers bring home at least the minimum wage in cash.

1. The countries include: Argentina, Chile, Panama, Venezuela, Mexico, Armenia, Czech Republic, Israel, Malta, Romania, San Marino, Slovakia, Spain, Islamic Republic of Iran, Mauritius, Seychelles, Tunisia, and Cambodia.
2. ILO General Survey 2014 on minimum wage systems
3. Carta, L. 2014 unpublished study commissioned by the ILO. Comparative study on the legal and regulatory provision on minimum wages and working time applying to domestic workers.
4. Ibid.