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Calculating your pay: 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.
What to do first
This article should be read after you understand the first Directgov article 'Calculating your pay: the basics'. The first article explains the background to calculating your pay and contains some essential facts.
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 proportion 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 per week
- 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 hours 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.
Step 1: work out how many hours you did over a 12 week period (42 nine hour shifts = 378 hours).
Step 2: divide the number of hours you worked by 12 to work out your average weekly hours: 378 divided by 12 = 31.5 hours.
Step 3: 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 = £1620 divided by 12 weeks = £135.
Step 4: 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.
Step 5: 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 Acas (Advisory, Conciliation and Arbitration Service) or your local Citizen’s Advice Bureau.