NMWM08040 - Working time: salaried hours work: calculation year

Relevant legislation
Definition of calculation year

Example of a worker employed before 1 April 1999
Examples of a monthly paid worker employed after 1 April 1999

Example for a weekly paid worker employed after 1 April 1999
Examples of a two-weekly paid worker employed after 6 April 2020

Relevant legislation

The legislation that applies to this page is as follows:

  • National Minimum Wage Regulations 2015, regulation 24

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 monthly, weekly, two-weekly or four-weekly paid.

Amendments to the regulations made on 6 April 2020 allows employers to change a worker’s calculation year by specifying an alternative calculation year. This is subject to the following conditions:

  • The change must be notified to the worker in writing;
  • The notice includes an explanation of the effect of the change of the calculation year;
  • The alternative calculation year begins after the period of 3 months from the day on which the employer gave the notice;
  • The worker does not object in writing to the change, prior to the alternative calculation year starting;
  • A previous change to the worker’s calculation year has not already taken effect within a period of 6 years ending on the day on which the specified alternative calculation year begins;
  • The employer does not make any deduction or require the worker to make any payment or work any additional hours as a result of the change.

Each subsequent calculation year will begin on the anniversary of the nominated day.

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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 1: a worker performing salaried hours work has been continuously employed by their employer from 19 May 1998. Their calculation year will be 19 May to 18 May 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 1 May 2019.

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: a 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 2019.

Their calculation year will be 1 May to 30 April, but for the first year of their employment the period will be 10 April 2019 to 30 April 2020.

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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 4: a weekly paid worker performing salaried hours work starts employment on 10 April 2019.

Their calculation year is 10 April 2019 to 9 April 2020.

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

Example of a two-weekly paid worker employed after 6 April 2020

A worker commences employment on or after 6 April 2020 and meets the conditions for performing salaried hours work. They are not a “re-categorised worker” and will be considered as performing salaried hours work from the day they start employment.

Example 5: a two-weekly paid worker performing salaried hours work starts employment on 4 April 2021.

Their calculation year is 4 April 2021 to 3 April 2022.

Each subsequent calculation year will begin on the 4 April to 3 April each year.

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