Not being paid minimum wage?

[purpleme12]

I just tried to calculate this and I don't think I'm being paid minimum wage?
I am working 25 hours a week.
I am on an annual salary. And get paid at the end of each month.
I have worked it out using calculation on internet and according to my calculations I should be getting paid £1,238.95 each month

Can someone please clarify if I'm right?

😕

Are you taking tax and NI deductions into account?

Might be an obvious question, but have you accounted for tax, national insurance and any pension contributions?

No

Thanks will take another look

This is why I wanted to post to get someone else's opinion!

I got £1,329.33. I did £11.44 times 25 to get your weekly wage. Times that answer by 52 to get your yearly salary. Then divided that answer by 12 for your monthly salary.

What does your payslips say your gross monthly pay is? That is your pay before any deductions such as national insurance, student loan, tax, and pension.

What is the gross pay on your payslip? Is your salary a pro-rata eg 25/37.5?

Oh right that's a different figure to mine!

Perhaps I did mine all wrong!

Thank you I will get this up and have a look at this

They have not paid me minimum wage years ago so I wouldn't put it past them to do this

Will have a look at payslip

I work part time. It is pro rata of the full time salary I believe

Assuming you aren't getting a reduced minimum wage due to age, and that your pension contributions are 5%
You'll have £1115 gross per month after pension deduction.
You'll pay £13.58 tax per month and £5.43 national insurance.
So have £1096 left over as take home pay

Thank you that is really helpful

I think you’ve made a typo. This calculation equals £1,239.33.

https://www.thesalarycalculator.co.uk/salary.php

Your figure multiplied by 12 then divided by 52 and again by 25 gives an hourly figure of 11.44. But that doesn't take into account any tax/NI, pension contributions or other deductions.

Report it to HMRC, they have a department dealing with employers who don't pay NMW. They will keep your name out of it & hopefully do a snap inspection.

Per week - 25×£11.44=£286
Per year - £286×52=£14,872
Per Month - £14,872÷12=£1,239.33

£1,239.33 is your average gross monthly pay (before deductions)

Standard calculation, assuming no special tax allowances or codes,
is £1,185.77 average net monthly pay (after deductions)

Tax payment=£38.22
National Insurance payment=£15.35

The problem with averaging the monthly salary for minimum wage workers is that they may not receive minimum wage for every hour worked in a pay reference period.

For example if you are paid monthly & work 5 hours per day Monday to Friday, in October there were 23 working days which equates to:

5x11.44=
57.20x23=
1315.60

That means if you were paid £1239.33 in October you've been under paid by around 66p for every hour worked in October.

Whereas in February 25 with only 20 working days you'd be getting paid £12.39 an hour if you were paid £1239.33.

However, HMRC don't care that it may average out over the year they only care about the pay reference period.

So any employer paying NMW workers an average monthly salary using the hours pw x NMW rate x 52/12 method aren't meeting current NMW regulations.

Guess it's not the case here but peeps working term time only in a school are usually paid in 12 installments so if you use a benefit checking tool it will warn that pay is less than min wage.

I also think you should use 52.178 weeks - 365.25 average days in a year/7 days a week = 52.178

11.44 x 25 = £286 x 52.178 = £14,922.91 / 12 = £1,243.57

However, I think the guidance has changed for salaried staff so the maximum reference period is 3 months which can be up to 92 days
However the HMRC example uses annual hours so 25 x 52.178 = 1304.45 hours a year/ 12 =108.704 hours a month x £11.44 = £1243.58 monthly salary.

The good news is from next April it will be £12.21 x 108.704 = £1,327.28

https://www.gov.uk/minimum-wage-different-types-work/paid-an-annual-salary

@Harassedevictee that HMRC guidance is contradictory to NMW regulations, a pay reference period cannot be longer than 31 days.

@MamaDollyorJesus I agree. I always knew the maximum pay reference period was one calendar month but I am retired so thought the legislation had changed when I found the guidance. I wasn’t surprised the guidance might have changed because I know there was a brewing issue as NMW increases.

I have checked the HMRC technical guidance and it is one month. https://www.gov.uk/hmrc-internal-manuals/national-minimum-wage-manual/nmwm09020

@purpleme12 Sorry, please ignore my previous post.

Assuming you work Monday to Friday 5 hours a day. In October there are 23 working days so 23 days x 5 hours x £11.44 = £1315.60 is the minimum gross pay you should receive.

@Harassedevictee lucky you! I'm still in the thick of it with 20 years until retirement

@MamaDollyorJesus Thanks I am well out of it. You have my sympathies.

I think next April’s increase to NMW maybe a tipping point for employers with salaried staff.