Calculating your pay
It's important to know how to calculate a week's pay as it is used to work out how much you should get when claiming some employment rights, such as redundancy pay. It is not always the same as your average pay, or the pay you get in a typical week.
A week's pay
The pay you are due each week under your employment contract can be different to your average pay over a month or your pay in a typical week. The amount you earn in a week under your contract of employment is linked to several of your individual employment rights. These are:
- redundancy pay and pay during time off for job hunting
- pay during your notice period
- holiday pay (if your working pattern changes)
- guarantee pay for work (if your employment can't provide you with work, but is bound under your employment contract to pay you anyway)
- certain types of compensation awarded by employment-related Tribunals
The '12-week period'
When you calculate your week's pay, you may have to average your pay and hours over a 12-week period. These 12 weeks must be the last full 12 weeks that lead up to the reason you need to calculate your pay, for example:
- to calculate pay during time off for job-hunting, use the 12-week period leading up to the day you were first given your redundancy notice
- to calculate notice pay, use the 12-week period leading up to the first day of the notice period
- to calculate paid annual leave, use the 12 weeks leading up to your holiday
- to calculate guarantee payments, you should normally use the 12 weeks leading up to when your payment is due; if you no longer work for that employer use the last 12 weeks of your employment
Calculating redundancy payments will depend on your situation and you should seek personal advice from the Labour Relations Agency (LRA) or Advice NI.
If you did not receive pay for work during the 12-week period (for instance you received holiday pay) you should use the previous week in your calculation. For example, if during the 12-week period you did not receive pay for three weeks you should look at a 15-week period and only include those weeks you were paid for work.
Calculating basic fixed wages, salary or hourly rate
If you have the same pay every week or month then your weekly pay will be your pay for your basic contract hours. Any bonuses or allowances (except an expense allowance) which do not vary with the amount of work you do can also be included in calculating your week's pay.
If you are paid by week then the amount you are paid is your weekly pay.
You can't include overtime hours when calculating your week's pay unless your employer must pay it to you under your contract of employment.
Working outside your normal work hours
If you do some work outside of the hours you normally work, for example voluntary overtime, it can be included when calculating your average week's pay. However if you are paid a higher overtime rate for work that could be done in normal hours, the higher rate of pay can't be used when calculating your week's pay.
No normal working hours
If you have no normal working hours your amount of a week's pay is your average pay over the 12-week period leading up to the time that you need to calculate for. For example, a sales rep paid by commission.
If, for example, you are being made redundant, you should use the last 12 full weeks you worked leading up to the day you were given notice of your redundancy.
If you receive no pay one week, then you should look at the week before. For example, if you are looking at a 12-week period, but you did not receive any pay during three weeks of that time, you should look back for 15 weeks.
Work done for a previous employer
Time you have worked for a previous employer can be included when calculating your average weekly pay, if the change in your employer did not break your continuity of employment.
More complex calculations
If your pay or working hours vary from week to week then calculating your week's pay will be slightly more difficult. You will need to average your working hours and pay over a 12-week period.
Calculating piece-rates, variable bonuses or commission
Sometimes pay varies depending on the amount of work you do, possibly because of:
- variable bonuses
- piece-work - this is where you are paid by the amount of work you do, rather than by the hour
If this is the case, you will need to calculate your average hourly rate over a 12-week period before working out your weekly pay.
To calculate your week's pay you can only use hours you were working. This does include overtime hours, although your pay will have to be adjusted to take into account work done outside normal work hours. If you have less than 12 weeks' service, other factors could be taken into account, such as your working pattern.
If you are paid a quarterly bonus then you can include a part of that bonus in your 12-week average weekly pay. You need to divide the amount by 13 (the number of weeks in a quarter of a year) and multiply by 12 (the number of weeks your pay is averaged across). For example, you receive a quarterly bonus of £260:
- divide £260 by 13 weeks = £20
- multiply £20 by 12 weeks = £240
You can include a bonus of £240 as part of your 12 week average weekly pay.
If you receive an annual bonus you should divide the amount by 52 (the number of weeks in the year) and then multiply by 12. For example, you receive an annual bonus of £5,200:
- divide £5,200 by 52 weeks = £100
- multiply £100 by 12 weeks = £1,200
You can include a bonus of £1,200 as part of your 12 week average pay.
Once you have added up the amount you have been paid for work over the 12-week period and included any bonuses, you then need to divide the figure by the number of hours you worked in the 12-week period. That will give you your hourly rate, which should be above the National Minimum Wage. To calculate your weekly wage you should then multiply your hourly rate by the average hours you worked in the 12-week period.
Shift or rota work
If you do shift or rota work where the times of day or hours you work vary, your week's pay will be the average number of hours you work at an average pay rate over a 12-week period.
For example, your normal pay is £6 per hour and you work three nine hour shifts and then you have three days off. On days where you work on a Saturday or Sunday you are paid £9 per hour. At the start of the 12 week period, your first day at work is a Monday.
Work out how many hours you did over a 12 week period (42 nine hour shifts = 378 hours)
Divide the number of hours you worked by 12 to work out your average weekly hours: 378 divided by 12 = 31.5 hours
Calculate your average weekly pay, first by calculating your average weekday earnings. You would have worked 30 weekday nine hour shifts, being paid £6 per hour. 30 shifts x 9 hours =270 hours x £6 = £1,620 divided by 12 weeks = £135.
Then calculate your average weekend. You would have worked 12 weekend nine hour shifts being paid £9 per hour. 12 shifts x 9 hours = 108 hours x £9 = £972 divided by 12 weeks = £81 per week.
Add together your average weekly pay for weekday and weekend shifts £135 + £81 = £216 average pay per week.
Where to get help
If you need further advice or support in calculating your week's pay you should contact the Labour Relations Agency or Advice NI.