Fair pay

This is the amount of pay an employee or worker is due per week under their contract. A week runs from Sunday through to Saturday.

While an employee or worker may not be paid weekly, it is important to know what their pay each week is, because it will determine whether they are eligible for certain entitlements like statutory sick pay.

Average weekly pay

If an employee or worker's pay varies from week to week, then the employer must be able to work out what their average week's pay is.

This is usually done by using the 12 weeks immediately before the week the calculation is needed. Add up the total amount of pay for the period and divide it by 12 to get an average weekly figure.

Any week in which no hours were worked, and therefore no payment was due, should be discounted. For example, if, during the 12-week period, an employee did not work and did not receive pay for 2 weeks, you should look at a 14-week period but only use the 12 weeks they worked.

Working a 'week in hand'

This means an employee or worker receives their week's wage the week after it was earned. For example, if a worker begins a week's work on 1 January and is paid weekly, they would get paid for that week on or before the 14 January, not 7 January.

If you use this system, then when an employee or worker leaves, they will be entitled to the week in arrears in their final pay. It’s worth remembering that some benefits will stop at the moment the person starts working, rather than when they receive their first pay.

This may create financial difficulties for new workers. Providing an alternative, such as an option offering early first payment of salary, might alleviate any financial pressure if employee wants this.