Calculating my daily rate for extra days worked

[PepeLePew]

I have a four day a week contract, and we operate a salary sacrifice scheme for our pension scheme, which I am part of.

I have agreed with my employer that I will work five days a week going forward, but will do so on an ad hoc basis without a change to my contract. I understand the downsides to this - my pension and holiday entitlement won't reflect the increased hours, and so on, but I don't want it to be contractual at this stage, because I know there will be quite a few weeks when I can't or don't want to work the extra days. We might review the situation in a few months time to formalise it, but for now this works for me. The deal is that I keep track of time and let her know how many extra days I have done each month, and she will pay me for those at my equivalent daily rate, based on my four day a week salary.

That's fine, but my employer (small business, she doesn't really have much idea of employment law, and nor do I) has asked if my day rate should be at my base salary, or my post salary sacrifice rate. I contribute 6%, and therefore there is quite a material difference over time. If I work 40 of the 52 possible extra days this year, it works out at about £1400.

The thing is, I don't know the answer. As these payments aren't contractual and my pension won't reflect these extra days, I'm tempted to say it should be my daily rate before salary sacrifice. But that's obviously going to cost her more, so I want to think it through properly before going to her with an answer. Any advice much appreciated.

Hi
Firstly, your annual leave entitlement should reflect any additional days that you work - obviously the odd day extra here & there won't make a massive difference, but your HR dept should keep a record of additional days worked in case it does make a difference in terms of statutory minimum leave requirements. It doesn't matter if the extra days aren't contractual.

The additional days should be paid at your gross annual salary - your salary sacrifice is irrelevant in terms of this calculation. If you didn't deduct your pension contributions from your salary, she would still be paying exactly the same, it would just come to you directly instead of some of it going to your pension provider - no difference to her outlay at all, just the amount that is split between you and your pension pot IYSWIM.

We work out the number of working days in a year - 261 this year (don't take off public holidays because these form part of your paid annual leave entitlement): then divide your annual gross salary (full time equivalent) by 261 to give a daily rate.

Hope this helps.

Oops, just re-read to see that you work for a small company so probably no HR dept!

re leave entitlement: it matters because even if it isn't contractual, if you worked 5 days every week, it would mean that you would be entitled to 5.6 extra days holiday each year (including public holidays) - therefore, that means roughly 1/2 day extra leave for every 10 additional days you work.

Thanks, that's absolutely great. As far as leave goes, we have quite a flexible arrangement - I am quite senior and work v flexibly generally so taking more leave wouldn't be a problem. I often work from home if there is a school event and don't take it as a half day so I'm sure I get what I'm entitled to. She's super reasonable but this one stumped us - your explanation makes perfect sense so I will sort it out on that basis.