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HMRC internal manual

Statutory Payments Manual

Average Weekly Earnings (AWE) - SSP/SMP/SAP/ShPP/SPP: mistimed payments

A mistimed payment occurs when the date of the actual payment of earnings is early or later than the normal contractual pay day, for example, due to a holiday period which stops the wages being paid on their normal date.

An example of this would be if a monthly payroll is paid early because of the Christmas bank holiday or the company is closing for an annual holiday.

The divisor used to calculate the AWE should be adjusted to reflect the number of week’s pay which have been paid in the relevant period. For example, if nine weeks wages have been paid in an eight week relevant period because of a holiday, the divisor should be nine not eight.

These calculations only apply to regular payments of earnings which are being paid on a day other than their normal pay date. It does not include other payments made within the relevant period such as a bonus, commission payments, or adjustments to earnings for an earlier period or arrears of pay.

SSP example 1 - Employee received seven weeks wages in the relevant period

A weekly paid employee is paid each Friday and goes sick Monday 25 March. The contractual payday before the beginning of the PIW is Friday 23 March but no wage is received that day because there was a bank holiday. That payment is made the following Wednesday 28 March but this is after the end of the relevant period. The AWE should therefore be divided by seven weeks to represent the seven weeks wages received in the relevant period.

SSP example 2 - Employee received nine weeks wages in the relevant period

On the last normal pay day within the relevant period, two weeks earnings are paid together, one in advance, due to a company holiday. The company is closing down for one week. This means that nine weeks earnings have been paid in the eight week period. The AWE should be divided by nine as the sum of the earnings paid in the eight week period is nine, as they represent nine weeks earnings.

SSP example 3 - Employee is paid monthly and receives only one month’s wages in the relevant period

A spring bank holiday falls on the last day of May and coincides with the usual payroll for monthly paid staff. The payroll is therefore delayed until the second of June and falls outside the relevant period for the employee. As only one month’s wages has been received in the relevant period, the AWE should be calculated by multiplying by 12 then dividing by 52 to get a weekly amount.

SMP example - paid early for Christmas closures

An employee’s contract specifies that she is paid on the last working day of the month. Her normal payday is, therefore, always the last working day of the month.

Her EWC is 14 April 2019 to 20 April 2019

The QW is Sunday 30 December 2018 to Saturday 5 January 2019

The last normal payday on or before the Saturday of the QW was 14 December 2018 as her December salary was paid early because of Christmas.

The last normal pay day at least eight weeks before this is 28 September, so the relevant period is 29 September 2018 to 14 December 2018

Therefore the AWE should be calculated by dividing by three multiplying by 12 then dividing by 52 to get the weekly amount

A mistimed payment should not be confused with a payroll error.

For example if an error is made in the payroll resulting in a shortfall of pay received during the relevant period.

If the error is corrected outside of the relevant period it cannot be taken into account when calculating the AWE. Similarly, any late payment due to the employer having cash flow or insufficient funds is not considered a mistimed payment and calculation of the AWE would not be adjusted in these circumstances.