In the UK, while monthly pay is more common, weekly pay is a common occurrence in several industries, particularly those with a high number of hourly, shift, or temporary workers. This includes sectors like retail, hospitality, construction, manufacturing, and agriculture. Roles in these sectors can range from bar staff and retail assistants to warehouse operatives and construction workers.
This guide will provide a step-by-step guide to help simplify the process and give you a clear understanding of how weekly pay works.
What is Weekly Pay?
As suggested by the term, weekly pay is the total sum an employee earns in a week for their work - they’ll be paid on a weekly basis for their work instead of every month.
For those working hourly, shift, or on a rota basis, this is determined by the total hours worked in a week. For employees on a salary, weekly pay is a fraction of their monthly or annual salary.
The benefits of weekly pay for employees include better cash flow management, as it's easier to budget with a regular income. It can be particularly beneficial for lower-paid workers who might need more frequent access to their earnings. From an employer's perspective, weekly pay can help retain and attract employees who prefer more frequent pay periods.
However, weekly pay also comes with its challenges. From a payroll perspective, it can be more time-consuming and expensive to process weekly payments. It's also more likely to lead to inconsistencies due to the increased frequency of calculations. For employees, weekly payments could potentially encourage short-term financial planning, as opposed to saving or budgeting for longer-term expenses. It's essential for both employers and employees to weigh these pros and cons when considering a weekly pay structure.
Working out weekly pay for employers
Method 1: Converting Monthly Salary to Weekly Pay
For salaried employees on a fixed annual salary, their weekly pay can be calculated by multiplying their monthly wage by 12 (to account for the 12 months in a year) and then dividing the result by 52 (the number of weeks in a year).
As an example, if an employee has an annual salary of £30,000, you calculate their weekly pay by dividing the annual salary by 52, giving a weekly wage of around £576.92.
Method 2: Calculating a Weekly Salary Based on an Hourly Rate, Shifts or Irregular Hours
For employees paid by the hour, their weekly pay would be a multiple of their hourly rate:
- For shift or rota workers, weekly pay calculations consider total hours worked. For instance, a nurse working 3 twelve-hour shifts in one week and 4 in the next, at a rate of £15 per hour, would have a weekly pay of 36 hours * £15 = £540.
- For employees with irregular hours, the '52-week period' rule is beneficial (see below). If an employee worked a total of 1,200 hours over 52 weeks, for instance, you'd divide 1,200 by 52 to find their average weekly hours (23 hours), then multiply by their hourly rate to calculate their average weekly pay.
What is the '52-Week Period'?
The '52-week period' is a method used in the UK to calculate weekly pay for workers whose hours change from week to week. As an employer, you look at the worker's pay for the last 52 weeks they worked, ignoring any week they didn't work at all. You then add up the pay for these weeks and divide by 52 to get an average weekly pay.
If the worker has been with the business for less than 52 weeks, just work out this average with the number of weeks they’ve worked to date.
This rule is also used for holiday pay calculations, redundancy payments, and compensation claims. It helps give a fair view of what a worker usually earns, even if their hours vary a lot.
Calculating Additional Weekly Pay: Overtime, Bonuses, Commissions and More
Working Out Overtime for Weekly Pay
Overtime is typically paid at a higher rate. If an employee's standard hourly rate is £12 and the overtime rate is time-and-a-half (£18), and they work 5 hours of overtime, their additional pay would be: 5 hours * £18 = £90. This is then added to their regular weekly pay.
Calculating Bonuses and Commissions for Weekly Pay
Performance-related bonuses also need to be factored into weekly pay.
These sums need to be averaged over a specific period. For instance, if an employee earned £600 in commission over 12 weeks, the average weekly commission would be £600 divided by 12, equaling £50. This amount is then added to their regular weekly pay.
As an example, if your company provides an extra £500 for reaching a specific sales target, this bonus should be added to the employee's weekly wage if the target is achieved.
Work Done for a Previous Employer
If the employee worked for a previous employer during the same pay reference period, that pay may also need to be included in the weekly pay calculations. If the employee earned £1000 for a week's work with a previous employer, this amount should be added to their current week's pay.
Working Out Deductions from Weekly Pay
Lastly, deductions such as taxes, National Insurance, student loan repayments, and pension contributions must be considered. If the gross weekly income of an employee is £500, and £75 is deducted for these items, the net weekly income would be £500 - £75 = £425.
By understanding and applying these calculation methods, you, as an employer, can confidently and accurately determine weekly pay. This not only promotes transparency but also ensures fair pay for all employees.
Do You Pay Your Team Weekly? We Can Help.
Onfolk is a coud-based payroll and HR software especially built for companies with flexible work arrangements amongst their teams.
By combining payroll and hr under one roof, Onfolk reduces the amount of admin relating to running monthly and weekly payrolls, flexible and variable working hours, tracking time-off across teams etc - 90% of it becomes automated.
Find out more here.
Related articles:
- What is a zero-hour contract?
- How to calculate holiday entitlement for part time employees and workers?
- What does pro-rata mean and how to calculate it?
- Annualised Hours: Everything You Need to Know
- What is a Casual Worker? A Detailed Guide for the UK
In the UK, while monthly pay is more common, weekly pay is a common occurrence in several industries, particularly those with a high number of hourly, shift, or temporary workers. This includes sectors like retail, hospitality, construction, manufacturing, and agriculture. Roles in these sectors can range from bar staff and retail assistants to warehouse operatives and construction workers.
This guide will provide a step-by-step guide to help simplify the process and give you a clear understanding of how weekly pay works.
What is Weekly Pay?
As suggested by the term, weekly pay is the total sum an employee earns in a week for their work - they’ll be paid on a weekly basis for their work instead of every month.
For those working hourly, shift, or on a rota basis, this is determined by the total hours worked in a week. For employees on a salary, weekly pay is a fraction of their monthly or annual salary.
The benefits of weekly pay for employees include better cash flow management, as it's easier to budget with a regular income. It can be particularly beneficial for lower-paid workers who might need more frequent access to their earnings. From an employer's perspective, weekly pay can help retain and attract employees who prefer more frequent pay periods.
However, weekly pay also comes with its challenges. From a payroll perspective, it can be more time-consuming and expensive to process weekly payments. It's also more likely to lead to inconsistencies due to the increased frequency of calculations. For employees, weekly payments could potentially encourage short-term financial planning, as opposed to saving or budgeting for longer-term expenses. It's essential for both employers and employees to weigh these pros and cons when considering a weekly pay structure.
Working out weekly pay for employers
Method 1: Converting Monthly Salary to Weekly Pay
For salaried employees on a fixed annual salary, their weekly pay can be calculated by multiplying their monthly wage by 12 (to account for the 12 months in a year) and then dividing the result by 52 (the number of weeks in a year).
As an example, if an employee has an annual salary of £30,000, you calculate their weekly pay by dividing the annual salary by 52, giving a weekly wage of around £576.92.
Method 2: Calculating a Weekly Salary Based on an Hourly Rate, Shifts or Irregular Hours
For employees paid by the hour, their weekly pay would be a multiple of their hourly rate:
- For shift or rota workers, weekly pay calculations consider total hours worked. For instance, a nurse working 3 twelve-hour shifts in one week and 4 in the next, at a rate of £15 per hour, would have a weekly pay of 36 hours * £15 = £540.
- For employees with irregular hours, the '52-week period' rule is beneficial (see below). If an employee worked a total of 1,200 hours over 52 weeks, for instance, you'd divide 1,200 by 52 to find their average weekly hours (23 hours), then multiply by their hourly rate to calculate their average weekly pay.
What is the '52-Week Period'?
The '52-week period' is a method used in the UK to calculate weekly pay for workers whose hours change from week to week. As an employer, you look at the worker's pay for the last 52 weeks they worked, ignoring any week they didn't work at all. You then add up the pay for these weeks and divide by 52 to get an average weekly pay.
If the worker has been with the business for less than 52 weeks, just work out this average with the number of weeks they’ve worked to date.
This rule is also used for holiday pay calculations, redundancy payments, and compensation claims. It helps give a fair view of what a worker usually earns, even if their hours vary a lot.
Calculating Additional Weekly Pay: Overtime, Bonuses, Commissions and More
Working Out Overtime for Weekly Pay
Overtime is typically paid at a higher rate. If an employee's standard hourly rate is £12 and the overtime rate is time-and-a-half (£18), and they work 5 hours of overtime, their additional pay would be: 5 hours * £18 = £90. This is then added to their regular weekly pay.
Calculating Bonuses and Commissions for Weekly Pay
Performance-related bonuses also need to be factored into weekly pay.
These sums need to be averaged over a specific period. For instance, if an employee earned £600 in commission over 12 weeks, the average weekly commission would be £600 divided by 12, equaling £50. This amount is then added to their regular weekly pay.
As an example, if your company provides an extra £500 for reaching a specific sales target, this bonus should be added to the employee's weekly wage if the target is achieved.
Work Done for a Previous Employer
If the employee worked for a previous employer during the same pay reference period, that pay may also need to be included in the weekly pay calculations. If the employee earned £1000 for a week's work with a previous employer, this amount should be added to their current week's pay.
Working Out Deductions from Weekly Pay
Lastly, deductions such as taxes, National Insurance, student loan repayments, and pension contributions must be considered. If the gross weekly income of an employee is £500, and £75 is deducted for these items, the net weekly income would be £500 - £75 = £425.
By understanding and applying these calculation methods, you, as an employer, can confidently and accurately determine weekly pay. This not only promotes transparency but also ensures fair pay for all employees.
Do You Pay Your Team Weekly? We Can Help.
Onfolk is a coud-based payroll and HR software especially built for companies with flexible work arrangements amongst their teams.
By combining payroll and hr under one roof, Onfolk reduces the amount of admin relating to running monthly and weekly payrolls, flexible and variable working hours, tracking time-off across teams etc - 90% of it becomes automated.
Find out more here.
Related articles:
- What is a zero-hour contract?
- How to calculate holiday entitlement for part time employees and workers?
- What does pro-rata mean and how to calculate it?
- Annualised Hours: Everything You Need to Know
- What is a Casual Worker? A Detailed Guide for the UK
