Basic pay
[ch 1: page 7]Basic pay is the amount paid to a worker or employee before any additional allowances or bonuses are added or deductions made. It is therefore the minimum amount that a worker or employee would expect to receive for a particular time period. It can be understood as the rate for the job, usually set out in the employment contract or written statement of particulars that employers are required to provide to their employees.
Basic pay can be specified as an hourly rate, weekly or monthly wage, or annual salary. Where working hours are specified in an employment contract, it is still possible to calculate an hourly rate. This is important in order to check whether or not the employer is complying with the law in paying the minimum wage.
To calculate a weekly rate from an annual salary, divide the annual figure by 52.18. To get the hourly rate, the weekly rate should be divided by the normal contractual weekly hours. Therefore, if your annual salary is £20,000, your weekly wage is £20,000/52.18 = £383.38.
If you work a 37 hour week, your hourly rate is £383.38/37 = £10.36.
The basic rate may also be used to calculate an “enhanced” rate for working additional hours or for days not normally worked, such as weekends and bank holidays.