How to Automate the National Minimum Wage

GOV.UK has published details of how to calculate the minimum wage The comprehensive guidance runs to some 30 pages together with minimum rates of pay for different types of work. In order to ensure compliance, here are some steps required to automate the National Minimum Wage (NMW):

  • Annual salaried workers require the number of annual hours each year in the worker’s contract to be specified in the annual salary scheme. Working days also need to be taken into account.
  • Daily and Weekly time-sheet-based pay items require the number of hours per day/ hours per week to be specified in the timesheet scheme.
  • Piece (output) workers may require a benchmark average rate of pieces completed per hour specified on the piece-based timesheet scheme.
  • Multiple pay items e.g. salary, time and piece, and any combination of each.
  • NMW must be verified separately for each pay run. For example, the number of days in the pay period will vary. For example, different months are shorter and longer and have differing working days.
  • Deductions need to be included in the calculation.
  • Accommodation provided as a benefit-in-kind, whether free to subject to a deduction must be carefully included.
  • Where hourly work attracts premium rates of pay, e.g. overtime, this needs to be adjusted to the lowest pay rate in the pay period.
  • Age and status (e.g. apprentice) must also be taken into account.

paiyroll® automatically generates a Wage Analysis report for every pay run that summarises NMW before every pay run approval. Automating the National Minumum Wage ensures you keep the right side of the legislation.

Automatic National Minimum Wage report