Chapter NMWM08080
| Published date | 16 April 2016 |
| Record Number | NMWM08080 |
| Court | HM Revenue & Customs |
| Issuer | HM Revenue & Customs |
Relevant legislation
General
Calculating basic hours where salaried hours contract varied
Example: adjusting basic hours where contract varied
Comparison of adjusted basic hours against actual time worked
The legislation that applies to this page is as follows:
* National Minimum Wage Regulations 2015, regulation 25
The hours to be treated as worked in each pay reference period (NMWM09010) for a worker performing salaried hours work is based on a calculation using the worker’s basic hours (NMWM08030). This calculation enables annualised hours in a calculation year (NMWM08040) to be treated as being worked evenly throughout a year. However, where a worker’s contract is varied during the course of the calculation year, so that the hours under the contract are increased or reduced, it is necessary to adjust the basic hours for the calculation year to reflect the variation.
Where the contract is varied so that the worker ceases performing salaried hours work the adjustment to the basic hours is applied as if the worker ceases work (NMWM08060).
Top of page
Calculating basic hours where salaried hours contract variedWhere the worker continues to perform salaried hours work but the contract is varied, it is necessary to adjust the basic hours for the calculation year using a pro rata calculation as follows;
- the proportion of the basic hours attributable to the period from the start of the calculation year up to the day before the contract is varied, and
- the proportion of the basic hours attributable to the period[s] following the variation for the remainder of the calculation year.
The adjusted basic hours for the calculation year will be the total of a. and b.
a is calculated using the formula
B1 x D1
365
Where:
B1 is the worker’s original basic hours ([NMWM08030](https://www.gov.uk/hmrc-internal-manuals/national-minimum-wage-manual/nmwm08030)), and
D1 is the number of days in the calculation year for which the original basic hours apply
b is calculated using the formula
B2 x D2
365
Where:
B2 is the worker’s revised basic hours, and
D2 is the number of days for which the new basic hours apply
If a contract is varied again, i.e. more than once, it is necessary to re-visit calculation b. from the date of the new variation (NMWM08090).
Top of page
Example 1: adjusting basic hours where contract varied - monthly exampleA monthly paid worker performing salaried hours work has a calculation year from 1 April to 31...
To continue reading
Request your trial