A week's pay in the UK when software sets your hours and pay

Statutory redundancy pay, pay during notice, guarantee pay, some tribunal awards and several other rights are measured in "a week's pay". When hours come from scheduling software and pay includes commission, bonuses or shift premiums, the figure in an HR or payroll system may not match the statutory one. Chapter II of Part XIV of the Employment Rights Act 1996 sets out how a week's pay is calculated for the purposes of that Act.

The short answer: it depends on whether the employee has normal working hours. With normal hours and pay that does not vary, it is the pay for a normal week under the contract (s221(2)). With normal hours but pay that varies with work done, or shifts that vary from week to week, it is based on an average hourly rate over the last 12 weeks (ss221(3) and 222). With no normal working hours, it is average weekly pay over the last 12 weeks (s224). For redundancy pay and some unfair dismissal awards it is capped (s227).

Normal working hours

Normal working hours are usually the hours the contract fixes. Where an employee is entitled to overtime pay after a fixed number of hours in a week or other period, they have normal working hours, and those are the fixed number of hours (s234(1) and (2)). If the contract fixes a number or minimum number of hours that is higher than the hours without overtime, the normal working hours are that higher number (s234(3)).

The four cases

• Normal hours, pay does not vary with work done: a week's pay is the amount payable under the contract in force on the calculation date if the employee works throughout their normal working hours in a week (s221(2)).
• Normal hours, pay varies with work done: a week's pay is the pay for the normal weekly hours at the average hourly rate over the 12 weeks ending with the last complete week before the calculation date, or with the week ending on it if the calculation date is the last day of a week (s221(3)). Pay that varies with work done includes commission or similar payments that vary in amount (s221(4)).
• Normal hours on days or at times that vary: where the contract requires work on days or at times that differ from week to week, so that weekly pay varies, a week's pay is the average weekly normal hours over the 12 weeks multiplied by the average hourly rate over the same 12 weeks (s222(1) to (4)). This is the case most rota-driven shift work falls into.
• No normal working hours: a week's pay is average weekly pay over the 12 weeks ending with the last complete week before the calculation date (s224(1) and (2)). Weeks with no pay are left out and earlier weeks are brought in to make up twelve (s224(3)).

Rules for the averages

• Only hours actually worked, and the pay for those hours, go into the average hourly rate (s223(1)).
• If no pay was payable in any of the twelve weeks, earlier weeks are taken into account to make up twelve (s223(2)).
• Hours outside normal working hours paid at a higher rate, such as overtime, are counted as if worked in normal hours at the normal rate (s223(3)).
• Work for a former employer within the averaging period counts where that employment counts towards continuous employment, for example after a business transfer (s229(1)). See how continuous employment is counted.
• Where pay periods do not match the weeks being averaged, pay is apportioned in such manner as may be just (s229(2)).

If the employee has not been employed long enough for these calculations, a week's pay is the amount which fairly represents a week's pay, and the employment tribunal may look at pay received, pay offered and pay of comparable workers (s228(1) to (3)).

The calculation date

The 12 weeks run back from a calculation date, and that date depends on the right. For example, for guarantee pay it is generally the day the guarantee payment is for (s225(1)). For pay during statutory notice it is the day before the first day of the statutory notice period, and for a redundancy payment it is generally the date on which statutory minimum notice would have been given to end the employment on the relevant date (s226(1), (5) and (6)). A system that averages the last 12 weeks before the leaving date may therefore use the wrong window.

The cap

For a redundancy payment, a basic or additional award of compensation for unfair dismissal and certain other awards, a week's pay cannot exceed the figure in section 227(1), £751 in the text on legislation.gov.uk when this page was written (s227(1)). The figure is normally changed each year, so check the current amount. For the other rights in the Act, the Chapter sets no general cap, but individual rights can have their own daily or weekly limits.

Practical steps

• Employers: record which of the four cases applies to each contract, keep 12 weeks of hours and pay data per employee with commission and premiums identified, and apply the calculation date for the right in question. Exclude overtime premiums from the hourly rate, and use the current cap for redundancy pay. See statutory redundancy pay and guarantee pay for workless days.
• Employees: keep payslips and rotas for at least the last few months. If a payment is based on a week's pay, ask which calculation date and which weeks were used, and whether commission and variable shift pay were included.

These provisions extend to England, Wales and Scotland. This page is general information on the law in Great Britain as at 1 November 2026, not legal advice.