Pay

All employees are entitled to be paid for the work they have done. They are also entitled to be paid if they are ready and willing to work but their employer has not provided them with any work to do, unless your employment contract says otherwise.

If you're an employee, you're entitled to be paid if you can't work because you are off sick or away from work on maternity leave, paternity leave or adoption leave, or parental leave. You are also allowed a certain number of days paid holiday a year.

In most of these situations, you are entitled to your usual wage whilst off work. There are some exceptions to these rules. For example, parents on maternity leave, paternity or adoption leave, or parental leave, are entitled to a certain amount of paid leave but the law sets out the rate at which this must be paid and it may not be as much as their usual wage.

If you are employee on sick pay, your contract may give you less pay than your normal pay. By law, most employees are entitled to the legal minimum statutory sick pay. Your contract may give you more pay than this.
You may be entitled to unpaid time off work in other circumstances, for example, in a family emergency or on jury service.

Salary Sacrifice Schemes - Childcare Vouchers
An employer can offer childcare support to employees under a 'salary sacrifice' scheme. This is a scheme which allows a worker to give up part of their salary in return for vouchers to pay for childcare. There are tax advantages to these schemes, but receiving a childcare voucher instead of pay may reduce your pay to below the lower earnings limit and could affect your right to certain benefits.

How much pay?

Nearly all workers are entitled to the national minimum wage - see under heading National minimum wage (NMW) for more details. The worker may be entitled to more than this under their contract.

Any amount of wages on top of the national minimum given by law, or the amount of wages for workers who are not covered by the national minimum wage, depends on the worker's individual contract of employment.

Employers must not discriminate in the amount that they pay their workers, for example, by paying black workers less than white workers who are doing the same job, or by paying women less than men when they are doing work of equal value. This is known as 'equal pay'.

How should an employee be paid?

There is no legal right to have wages paid in any particular way, for example, for an employee to have their wages paid direct into their bank account.

The way that an employee's wages are paid will depend solely on what their contract of employment says about how their wages should be paid. If they do not have a written contract, they still have a contract of employment, but it will be a verbal contract. In cases where there is a verbal contract rather than a written contract, the way wages should be paid should have been agreed between the employer and employee, or if not, will depend on how the employer usually pays the wages of the employees in that workplace.

Written Statement of Terms and Conditions of Employment

All employees who have worked for their employer for at least two months are entitled by law to a 'written statement of their terms and conditions of employment'. This written statement should include, amongst other information, details of how frequently wages should be paid, such as weekly or monthly.

The employee's contract should give the following details about their wages:

when wages are paid, for example, at the end of the week, at the end of the month
whether wages are paid in advance or arrears. With monthly pay, it is common to be paid partly in advance and partly in arrears. With weekly pay, it is usual to be paid in arrears, that is, wages are paid after the work has been done
if wages are paid a week in hand. Sometimes if an employee is paid weekly, they have to work for two weeks before they receive any pay. This means that they are always, effectively, being paid a week in arrears and are owed a week's pay throughout their employment. This week in hand payment will be made when the employee leaves the job.

Right to a payslip

All employees are entitled to an individual written payslip, at or before the time they are paid. The payslip must show:

gross pay, that is, pay before any tax or national insurance has been taken off
the amounts of any deductions which change from week to week, for example tax and national insurance, and what the deductions are for
the total amount of any fixed deductions. These are deductions which do not change from week to week, for example, union dues. An employer does not have to give details of what these deductions are for as long as they give a separate statement with these details on at least once a year
the total amount of take-home pay after deductions.

An employer is only entitled to make certain deductions from an employee's pay.

National Minimum Wage (NMW)

Workers in the UK aged 16 (and above school leaving age) or over are legally entitled to a national minimum hourly wage. It does not matter where they work, the size of the firm or the worker's occupation. This includes casual labourers, agency workers, homeworkers, workers on short-term contracts and workers employed by sub-contractors.

Workers who aren't entitled to the National Minimum Wage:

workers aged under 16;
some people living and working within a family such as nannies, and au pairs. Such a worker will not be entitled to the NMW if they live in the family home where they work and they share meals with the family and they do not have to pay towards their accommodation costs or meals; or
genuinely self-employed people.
members of the armed forces (but civilians working for the reserve forces or the ministry of defence are covered)
share fisherman
prisoners
voluntary workers
some trainees on government schemes
workers who are homeless or living in a hostel, who are entitled to Income Support, income-related Employment and Support Allowance or income-based Jobseeker's Allowance and who are taking part in a scheme run by a charity which provides them with work
residential members of religious communities which are charities.

Which types of pay and which hours of work count towards the NMW?

The rules about which elements of a worker's pay, and which hours of working time, count towards calculating the NMW are very complicated.

You should contact the NMW helpline on 0845-650-0207 to check whether you are entitled to the NMW.

If you think you are entitled to the National Minimum Wage and are not receiving it you should contact the NMW helpline or your Union.

Is an Employer entitled to make Deductions from an Employee's Pay?

By law, an employer is only entitled to make certain deductions from an employee's pay. If the employer does not pay the employee at all, this counts as a 100% deduction. There are rules about what counts as pay for the purposes of when the employer can make deductions.

In most cases, an employer can only lawfully make a deduction from an employee's pay if the deduction is:

required to be made by law. For example, employers are required to deduct tax and national insurance from their employee's pay by law; or
allowed for by the employee's contract. This means that there must be a specific clause in the contract which allows for that particular deduction to be made. The deduction can then only be made lawfully if the employee is given a written copy of that term in the contract before any deduction is made under it. This would cover deductions such as union dues or payments to a pension scheme; or
the deduction has been agreed to in writing by the employee before it is deducted.

There are particular deductions which an employer can make which do not have to fit into the categories listed above. These deductions are:

a deduction because the worker has been genuinely overpaid
a deduction made because the employee took part in industrial action
a deduction made by an employer under a court order or an order from an employment tribunal, such as an attachment of earnings order.

What counts as Pay?

When considering whether an employer can make a deduction from an employee's wages, the following all count as wages:

normal pay including fees, bonuses and commission, but not payments for expenses
holiday pay
payments ordered by an employment tribunal, such as payment of wages between an employee being dismissed and being given their job back
payments which have to be made by law instead of wages, such as guarantee payments when the employee takes time off to do union work or look for a job if they are to be made redundant
statutory sick pay
statutory maternity pay, statutory paternity pay and statutory adoption pay.

Pay