How is my pay calculated?

Pay is described in employment legislation as "wages". The employer has a duty to pay wages, which are generally dealt with as an express term in the contract of employment.

How your wages are calculated should be explained in a written statement of particulars, which should be given to you within eight weeks of starting work. Any subsequent variation should also be notified to you, in writing, within one month of the change.

Wages comprise the basic rate of pay plus any other monetary element (e.g. overtime, bonus, commission etc.).

Wages may be paid in the form of an annual salary, where it is usual to pay on a monthly basis, or, for hourly paid employees, at weekly intervals.

Salaried employees are usually paid one-twelfth of their annual salary each month.

Hourly paid personnel are usually paid for the number of hours worked during the relevant week.

The basic salary or rate of pay may be supplemented by any overtime, bonus or commission earned. This then becomes gross wages from which the employer is required to deduct the appropriate national contributions and income tax due.

Other deductions from wages, such as union subscriptions, may be made by agreement. The balance then becomes net wages.

An itemized pay statement, setting out the various elements of pay earned and deductions made, must be given to the employee whenever wages are paid.