How is my pay calculated?

Employers have 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 elements, such as paid overtime, bonuses or commission, for example. Wages may be paid in the form of an annual salary, where it is usual to pay on a monthly basis or, for employees on an hourly rate, at weekly intervals.

Salaried employees are usually paid one-twelfth of their annual salary each month. Staff paid by the hour 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, bonuses or commission earned. These add up to your gross wages, from which your employer is required to deduct the appropriate National Insurance contributions (NICs) and income tax due. Other deductions from wages, such as union subscriptions, may be made by agreement.

The balance less NICs, income tax and and other deductions are your net wages. You should by law receive an itemised pay statement setting out the various elements of pay earned and deductions made whenever your wages are paid.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.