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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
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Working time: salaried hours work; considering adjustments for starting employment

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 22
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 21(2) & 22(2)

General

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, when a worker starts or ends (NMWM08060) their employment it is necessary to ensure that any part worked pay reference period is taken into account.

Worker starts employment

Where a monthly paid worker starts their employment part way through a month, their initial calculation year will be slightly longer than a calendar year (see Example 2 of NMWM08040). In this instance, the first pay reference period will be less than a month and a pro-rata calculation is required to identify the time to be treated as worked for the first pay reference period:

B x      
           365
 

 Where

B is the worker’s basic hours (NMWM08030), and

N is the number of days in the shortened pay reference period.

This calculation is not required for a worker performing salaried hours work who is paid weekly or is monthly paid and employed for the whole month of the pay reference period (i.e. from the 1st) as there is no shortened pay reference period.

Example of calculating hours worked in a shortened pay reference period

A monthly paid worker performing salaried hours work has 2080 basic hours and starts employment on 10 April 2014.

  • The time treated as worked for each full pay reference period is 173.33 hours (173 hours 20 minutes) based on the calculation, 2080 ÷ 12 (NMWM08035)
  • The number of days in the first pay reference period is 21 based on the period 10 April to 30 April inclusive.
  • The time treated as worked for the shortened, initial pay reference period is;

 

2080 x      21     = 119.67 hours
                     365

 For this worker the hours treated as worked in the initial, shortened pay reference period is 119.67 hours with each subsequent following pay reference period being 173.33 hours.

This means that for the initial calculation year 10 April 2014 to 30 April 2015, the total basic hours will be 2199.67 hours (119.67 hours for 10 April 2014 to 30 April 2014 plus 2080 hours for 1 May 2014 to 30 April 2015).