How to Calculate a Week's Pay

Schedule 1 to the Employment (Jersey) Law 2003 sets how to calculate a week’s gross pay covering three different types of working arrangement:

SET/FIXED PAY (on a stated number of contracted hours)

The terms of employment sets out a number of working hours (overtime nor commission payments are included) for an agreed 'basic wage'.  

If wages are paid monthly and the terms of employment include an annual sum then this needs to be divided by 52 in order to calculate the weekly amount. 

Example: terms of employment state 35 hours per week and an annual salary of £23,000 - overtime can be worked and commission on sales earned, however a week's pay will be calculated as follows:

£23,000/52 = £442.31 per week (neither the overtime and/or the commission payments are used in the calculation).

SET HOURS BUT VARIABLE PAY (this is when there may be different hourly rates for different working hours (eg night shifts) and/or the amount of work undertaken (eg based on output of the employee)

The terms of employment sets out a number of working hours (overtime nor commission payments are included), however the amount paid to an employee varies due to either the time of work, or the amount of work produced.  The calculations for a week's pay is the average taken over a 52 weeks period (or the number of weeks an employee has worked if this is less than 52 weeks).  Any week in which the employee did not receive any pay is not counted in the calculation period (this could be due to an agreed break/temporary lay-off, sickness or a period of unpaid leave).

The amount earned over 52 weeks (or less if employment has not been for 52 weeks) is calculated and then divided by 52 weeks to give the average weekly earnings.

Example: terms of employment state 35 hours per week however the hourly rate for night duty is £15.00 per hour whilst for day time duty is £10.00 per hour - again overtime can be worked, however a week's pay will be calculated as follows:

35 hours per week over 52 weeks, however it is the average earned over this period.  So if at the end of the year the employee has earned £18,000 as a total their average weekly earnings (regardless of these being night or day duties) would be £346.15. (overtime  payments are not used in the calculation).

NO SET HOURS (this is a more casual arrangement and would be used in cases of zero hour contracts).

The terms of employment does not set out any normal working hours, therefore calculations are based on the average of pay received over a 52 week period.. 

The calculations for a week's pay is the average taken over a 52 weeks period (or the number of weeks an employee has worked if this is less than 52 weeks).  Any week in which the employee did not receive any pay is not counted in the calculation period which, however the 52 weeks should look back to earlier weeks in order to arrive at 52 weeks.

The amount earned over 52 weeks (or less if employment has not been for 52 weeks) is calculated and then divided by 52 weeks to give the average weekly earnings.

Example:  for an employee on a zero hour contract the calculations would be:

Total salary earned over a 52 week period, so say £9,750 has been earned over the 52 weeks as a total sum, the average weekly earnings would be £187.50 per week.  If the employee had only been employed for 26 weeks (but had earned £9,750) then their average weekly earnings would be £375.00 per week.

ANTE-NATAL AND/OR PAID PARENTAL LEAVE

This calculations for an average week's pay for the above purposes are based on 12 weeks of employment not 52 as for other purposes.

Example:  An employee has been employed for 15 weeks, and earning £5,000, the average weekly pay would be calculated as £5,000 / 12 (weeks) giving £416.67 as the average weekly earnings.

The Tribunal have provided information on calculating on compensation levels.