It is very necessary to gain knowledge about how to calculate your salary pay as it is required to find out how much you should be paid when claiming some employment rights. In this article we will discuss about week’s pay, monthly pay and annually pay. Lets have a look on the points mentioned below:
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. While joining any job, they provide you the contract, so under contract of employment , the money you will earn in a week is linked to some of your employment rights. Some of the rights are given below:
- Redundancy pay and pay during time off for job hunting
- Pay during your notice period
- Holiday pay (if your working pattern changes)
- If they do not provide you any work but you have already signed the contract then they have to pay you.
- Certain types of compensation awarded by employment-related Tribunals
Check our previously published article on Can You Pay an Employee Salary and Hourly?
Calculating basic fixed wages, salary or hourly rate
When an employee has a fixed rate of pay every week, month then the weekly income will be his pay for the fundamental contract hours. Any extra income or bonuses which do not differ with the quantity of work you are doing, can come under working out your week’s pay too. If the employer pay you for the week then it is your weekly pay.
You couldn’t add hours of overtime work during the calculation of your week’s pay. If it is written in the contract of employment that you will get overtime pay also then you can include it in calculating of your weekly pay.
Working outside your normal work hours
If the employees do extra work more than they generally do, for instance working overtime, it can under calculate your average week’s pay. But if you are getting a higher rate of overtime for the specific work that you can do in work hours also, then that overtime rate of pay can’t be taken when working out your week’s pay.
No normal working hours
If the employees do not have working hours which are normal then your money of a week’s pay is the employee’s average pay over the 12-week period.
And if you get no paid one week, then you should check at the week before. For example, if you are looking at a 12-week period, but you did not receive any pay during the three weeks of that time, you should look back for 15 weeks.
Work done for a previous employer
If you had worked at another place or for another employer than the time you have worked there can be taken when working out your average weekly pay, this will happen only when the shifting in your job or employer did not disturb your continuity of employment.
More complex calculations
If your pay or hours of working of a particular job fluctuate from week to week and this is happening every week then working out your weekly pay will be a little more hard then the previous one. You will need to average your working hours and pay over a 12-week period.
Calculating piece-rates, variable bonuses or commission
The reason for the variation of rates of working hours from week to week is the quantity of work you do. Some of the main reason are mentioned below:
- Variable bonuses
- Commission
- If you are getting paid on the basis of the quantity of work you do and not on the basis of working hours.
In such cases, you have to work out your average hourly rate over a 12-week period before calculating your weekly pay.
To calculate your week’s pay you can only use hours you were working. Overtime hours do not come under this, despite the fact that your pay will have to be altered to take into account work done beside the normal work hours. If you have done less than 12 weeks’ service, other factors could be taken into consideration such as your way of working.
Read our previously published article on How does salary pay work if you miss a day?
Quarterly bonuses
If you are getting paid a quarterly bonus then you can take a part of that bonus in calculating your 12-week average weekly pay. For calculating you require to divide the amount by the number of weeks in a quarter of a year that is 13 and then multiply it by the number of weeks your pay is averaged across that is 12.
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.
Annual bonuses
In the case of getting an annual bonus ,for calculating you have to divide the amount by the total number of weeks in the year that is 52 and then multiply it 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 included up the money you have been getting paid for work over the 12-week period and by including 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 pay, 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.
Frequently asked questions
The average salary in the UK is £2,934 per month, or £35,204 per year before tax, according to ONS and HMRC. However, averages can be skewed by high-income earners. For a more reliable estimate, we can look at the median gross salary in the UK, which stands at £2,342 per month, or £28,104 per year.
The government of the UK impose a National Living Wage at the rate of £11.44 per hour for workers, who are older than 21 years, and a National Minimum Wage for those of no less than school-leaving age: £8.60 per hour for ages 18 to 20, and £6.40 per hour for those under 18 and apprentices.
Conclusion
In summing up the entire discussion, we came across the method of finding or calculating our salary pay. Now you have to know about how are hourly and salaried gross pay calculated. If the pay and number of working hours changes from a week to another week then you have to some calculation which are slightly harder than calculating for the normal hours of work.
