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The terms of a contract of employment can include various ways in which the entitlement to pay is calculated. For example, the employee may be paid solely by reference to hours worked or some, or all, of his pay entitlement may be related to performance levels. Employees may also be paid at various intervals, although pay intervals of a week or a month are the most commonly used. However, a common measure of pay is needed for the purposes of the calculating the amounts that the employer must pay in relation to many of the statutory employment rights (such as holiday pay or breaches of the right to statutory notice, the right to written reasons for dismissal or the right to an appeal against dismissal). The common measure used is the employee’s weekly pay.

This guidance note focuses on the method of working out a week’s pay as set out in detail in the Employment Rights Act 1996.