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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
Updated
, see all updates

Working time: salaried hours work; calculation year

Relevant legislation

The legislation that applies to this page is as follows:

For pay reference periods commencing

* on or after 6 April 2015; National Minimum Wage Regulations 2015, regulation 24
* before 6 April 2015; National Minimum Wage Regulations 1999, regulation 22

Definition of calculation year

The “calculation year” is the period which is used to check whether a worker has worked more than their basic hours (NMWM08030) during the course of an identified annual period.

Where a worker never works more than their basic hours (NMWM08100) there will be no need to identify their respective calculation year.

The calculation year is identified by considering the start date of the worker’s employment, taking into account whether they have been employed by the employer since before the introduction of the national minimum wage (1 April 1999) and whether they are weekly or monthly paid. The start and end dates of calculation years are identified as follows;

Example for a weekly paid worker employed after 1 April 1999

  • For a weekly paid worker; the year beginning with the first day of their employment.

Example 1: a weekly paid worker performing salaried hours work starts employment on 10 April 2014.

Their calculation year is 10 April 2014 to 9 April 2015.

Each subsequent calculation year will begin on the 10 April to 9 April each year.

Examples of a monthly paid worker employed after 1 April 1999

  • For a monthly paid worker the identification of the calculation year will depend on whether they begin on the first day of the month or on a later date in the month.

Example 2: a monthly paid worker becomes employed on the first day of the month.

A monthly paid worker becomes employed on the 1 May 2014.

As their employment falls on the first day of their monthly pay references period, their calculation year will be 1 May to 30 April each year.

Example 3: monthly paid worker becomes employed after the first day of the month.

A monthly paid worker performing salaried hours work starts employment on 10 April 2014.

Their calculation year will be 1 May to 30 April, but for the first year of their employment the period will be 10 April 2014 to 30 April 2015.

Example of a worker employed before 1 April 1999

  • For workers continuously employed with the same employer since before the introduction of national minimum wage their calculation year will be the year beginning on an anniversary of the start of that employment.

Example 4: a worker performing salaried hours work has been continuously employed by their employer from 19 May 1989. Their calculation year will be 19 May to 18 May each year.