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

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