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Wages problem


Rea
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This has been mentioned in previous threads about wages but, I've just discovered that our wages are a mess.

If I give you an example it will be easier than trying to explain it.

£per hr x hrs per week x 4 = wages per month.

£per hr x hrs per week x 4.6 = holiday pay.

Added together and split into 12 equal monthly payments.

When worked out though, the hourly rate doesnt meet the minimum wage over 12 months even though its above it if calculated as 38 weeks.

Does this mean staff arent paid min wage even though they are seeing as they dont work all year? The accountant has never said anything but I'm worried now!

 

 

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Well that's how we do our salaries. Surely it's not necessary to do it over 12 months? It's like holidays isn't it? done on a pro-rota basis?

If you were paid weekly and worked for over the min wage 3 days per week- you would be well under it if your salary was calculated over a full time hours, wouldn't you?

Sorry, does that make sense, I think I've confused myself now!!

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I think as long as you don't 'force' your staff to be paid this way it's ok.

I'm sure I read on the gov site that it acknowledges some employees prefer to be paid this way, therefore as long as they are aware of your possess its ok, however if they want normal type payments this must be followed.

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minimum wage is calculated for the actual hours worked... not for the duration it is paid over...

you may be paying over a 12 month period, but the wage is covering the 38 weeks plus holiday pay... so would be fine.. it is how many work out a wage, so not unusual.. many want to have a regular amount paid each month.

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Well that's how we do our salaries. Surely it's not necessary to do it over 12 months? It's like holidays isn't it? done on a pro-rota basis?

If you were paid weekly and worked for over the min wage 3 days per week- you would be well under it if your salary was calculated over a full time hours, wouldn't you?

Sorry, does that make sense, I think I've confused myself now!!

We do it over 12 months because otherwise staff would have some months with no pay wouldnt they?

 

They arent forced to be paid this way, infact their contact states that we've been informed its unlawful but will follow their wishes.

 

I'm glad I'm not the only one to do it this way :D

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I work my term time only out slightly differently to you as there are sometimes more than four weeks in a month so mine is;

£per hour x hours worked per week x number of weeks worked per year = annual pay

£per hour x hours worked per week / 52 weeks in year x number of weeks worked = holiday pay pro rata

I add the two together and then divided by 12 for monthly pay.

Hope this helps

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This has been mentioned in previous threads about wages but, I've just discovered that our wages are a mess.

If I give you an example it will be easier than trying to explain it.

£per hr x hrs per week x 4 = wages per month.

£per hr x hrs per week x 4.6 = holiday pay.

Added together and split into 12 equal monthly payments.

When worked out though, the hourly rate doesnt meet the minimum wage over 12 months even though its above it if calculated as 38 weeks.

Does this mean staff arent paid min wage even though they are seeing as they dont work all year? The accountant has never said anything but I'm worried now!

 

 

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The 4.6 is the pro rata holiday for part time, term time only staff. Take a look at the site Louby Lou suggested, its simple.

We've always don't it this I think, if we pay for hours worked and then give holiday pay seperatly, some months would be loads less than others, staff didnt want that :)

Thanks everyone, I knew we were ok, but had a panic when I looked at what I'd be getting each week seeing as I'll only be there for 5 months :)

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Exactly how we do ours. As long as your original hourly rate is minimum wage thats fine.

The only time I have problems is when staff increase or decrease hrs during school year. I find it a nightmare making sure they have been paid enough for months worked and then re calculating the extra holiday.

buttercup

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we pay fortnightly, always have done and everyone has always been happy about it, there obviously are times where we get nothing or very little but personally I prefer it this was as I know what I am getting when - if you see what I mean. We have then broken the holiday pay down so we get 2 weeks in the summer, 2 weeks at christmas and 1.6 weeks at easter.

 

Just to throw a spanner in the works, the legal holiday entitlement for part time workers is actually 5.6 weeks not 4.6? this is what our accountant told us anyway.......... https://www.gov.uk/holiday-entitlement-rights

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That has thrown a spanner in the works! One of our staff works 3 days the others 5, although none are full days. None of our accountants have ever said anything about wages. I can feel a lie down coming.........

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Don't worry, if you go through the screens to calculate holiday pay there is an option to work it out on 'annualised hours' so easy enough to work out - hours per week x weeks worked per year. ;) No need to lose sleep or go for a lie down :1b

Edited by Pimms o'clock?
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yes holiday pay if you work all year is 5.6 at the moment...

but if you work term time only it is less... not holiday accrued for weeks not working .. hence the lower figure Rea has...

 

That said we were always paid the full amount due for full time work... it was seen as a bit of extra for all those unpaid hours we worked...

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Sorry Rea, I meant to add the 5.6 entitlement to my post and forgot- but it is on a pro-rata basis though. Not everyone will be entitled to the full amount- your staff member that does 3 days would get less than a four or five day working one. As pimms o'clock says the website will easily work it out for you or this may help

 

 

holiday entitlement.docx

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Don't worry, if you go through the screens to calculate holiday pay there is an option to work it out on 'annualised hours' so easy enough to work out - hours per week x weeks worked per year. ;) No need to lose sleep or go for a lie down :1b

Unfortunately the calculator is not suitable for term time workers - the example given by Lynned55's document is correct but just needs to be updated to reflect the 5.6 weeks holiday e.g.,

Total Hours Worked over the school year / 46.4 = A

A x 5.6 = B

B x Hourly Rate = Hol Pay Due

So an employee with a rate of pay of £7 per hour who has worked 20 hours per week for 38 weeks of term e.g, 760 hours will have holiday pay of £642.07 for the year which is paid over 5.6 pay periods not 1 pay period. (If you pay holiday pay over 1 pay period then they will pay tax and NI which they shouldn't as the weekly holiday pay averages out to be just over £114.)

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Crumbs this is a confusing thread read start to end in one go. Now I don't know if I have been doing it right all these years or not! I get a calendar and add up the number of Mondays, Tuesdays, Wednesdays etc that we work over the school year, adding in the 5.6 weeks (I actually do 6 weeks as it's simpler) then I multiply the number of Mondays by the number of hours a staff member does on Monday, and so on for the full week. This gives me a total number of hours worked over the year. Then I divide that by 12 to get an average hours per month, multiply that by the £ per hour and that's what they get. So the entitlement is spread out over the whole year.

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Yes you do have to be really careful - one year we worked out wages in sept for the year, using the x38 week method.... However as the funding is worked out on the financial year April - April , the way Easter fell actually meant staff had worked 39 weeks that year!!!!

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wages are always so complicated... a long time ago now Peggy a FSF member posted a spreadsheet that did lots of the calculations for staff that left mid year etc.. I used it all the time for the wages... sorry but not got a copy any more.. wish I had kept it ... it was in excel and put in dates and weekly wage over the year along with holiday pay etc it did ensure we had paid correctly if someone left mid year..

 

often if they left at beginning of year.. when paying over 12 months they actually owed us money! I will check but don't think I kept it..

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Does anyone have any experience/knowledge of long term sick for part time staff? as they are paid (stretched over year)person doesn't pay any NI so does this mean no entitlement to ssp or should the entitlement be worked on what would actually be paid a week for hours worked (say if paid weekly with no earnings in for closed weeks) has anyone come across this situation before ? Am getting really confused, nothing I'm reading relates to term time only. :/

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I did it on the gov website. It was based on normal earnings over the period. The nice taxman gave me the money I needed to pay her as collectively we weren't paying enough tax to cover it.

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