Calculating a week's pay
Calculating a week's pay

The following Employment guidance note provides comprehensive and up to date legal information covering:

  • Calculating a week's pay
  • The calculation date
  • What pay includes
  • Type of hours and payment structure

FORTHCOMING CHANGE: From 6 April 2020, new increased compensation limits for employment tribunal claims will come into force, including a revised figure of £538 (currently £525) for the maximum amount of a week's pay (used for calculating various awards including statutory redundancy payments and unfair dismissal basic awards), under the provisions of the Employment Rights (Increase of Limits) Order 2020, SI 2020/205. For full details of all the increased figures, see our News Analysis: Tribunal compensation limits: increased figures applying from 6 April 2020.

The concept of ‘a week’s pay’, calculated in accordance with sections 220–229 of the Employment Rights Act 1996 (ERA 1996), is important for a number of statutory employment rights, including:

  1. the statutory right to pay during a notice period—see Practice Note: Statutory minimum notice—Employee rights during the notice period

  2. calculation of the basic award or an additional award for failure to comply with an order for reinstatement or re-engagement in unfair dismissal cases—see Practice Notes: The basic award—Calculation, Reinstatement—Second stage reinstatement hearing—compensation and additional award and Re-engagement—Second stage reinstatement hearing—compensation and additional award

  3. calculation of the statutory maximum compensatory award for unfair dismissal (although not for assessing the amount of the compensatory award itself—see Practice Note: The unfair dismissal compensatory award—Statutory maximum

  4. calculation of a statutory redundancy