Rights to pay

What to expect in your pay packet and how to kick up a stink if you're short-changed.

Make sure you have more than a few coppers in your pocket.

As an employee you’re entitled to be paid (even when there isn’t work for you to do). You’ve also got the right, where applicable, to get sick pay, maternity pay, paternity pay and adoption pay.

These rights don’t apply if you’re a freelancer, so make sure you know if you’re employed or self-employed.

Rates of pay

As an employee your rate of pay, along with the details about how and when you get paid, sick pay and benefits will be found in your contract of employment. Your employer is legally obliged to provide the terms and conditions of employment within two months of your starting date, but it’s best if you can go over your contract with your employer as soon as you join the company.

Your pay will often be in arrears – i.e. you only get paid for work once it’s done. Normally your first payday will come within a month, depending on the company’s policy.

You can’t be paid less than the Minimum Wage.

Deductions

There will be some automatic deductions from your pay that are authorised by law – namely income tax, national insurance and student loan repayments. Your employer can’t make any other deductions without your agreement (for example, for pension contributions) unless you have previously been overpaid, you’ve taken part in industrial action or they have rights under a court order.

Employers in retail work are allowed to make additional deductions if stock or cash is missing due to theft by an employee or customer. They can take up to 10% of an employee’s gross pay on any single pay day (and can carry deductions over to the next pay day if the amount is greater than this). If an employee is leaving their job, the full amount can be taken from the final wage even if it is more than 10%.

If you find yourself getting wages deducted unfairly, get advice as soon as possible – for example, from your local Citizens Advice Bureau (CAB).

Payslip

All employees have the right to receive a payslip stating the gross pay, deductions, and the take-home pay after deductions.

Tips and service charges

Tips in cash count as a gift from the customer to the worker. As such they don’t form part of the worker’s pay, even if they’re shared out among all the staff. That means they don’t get taxed.

However, if a service charge is added to all bills automatically, or is added by credit card or cheque, it is the property of the employer. The employer can share it out between the workers as the employer wishes, and if a worker is paid part of this compulsory service charge, it will be treated as part of the worker’s wages and be taxed.

As of October 2009, your employer must pay the full Minimum Wage before any tips or service charges are added on.

Overtime

You may get paid for working extra hours, but it depends on what’s in your contract or if it’s an established practice at your workplace. The Minimum Wage still applies, so your average rate of pay shouldn’t fall below this.

It also depends on how you’re paid. If you’re on a fixed salary, you may not get overtime pay, but if you’re paid an hourly rate, then you must be paid for working extra hours.

Pay withheld

If your employer is withholding your pay, you should first try to resolve the issue with them directly. Make clear, with reference to your contract and past payslips what you believe you are entitled to and write a clear, factual, dated letter setting out your grievance.

Get help from your trade union if you belong to one, or contact your local CAB.

If the grievance is still not settled, you can take the matter to an employment tribunal.

Salary sacrifice schemes – childcare vouchers

An employer can offer childcare support to employees under a ‘salary sacrifice’ scheme. This is a scheme which allows a worker to give up part of their salary in return for vouchers to pay for childcare. There are tax advantages to these schemes, but receiving a childcare voucher instead of pay may reduce your pay to below the lower earnings limit and could affect your right to certain benefits.