weekly - monthly pay

Simon_Stir

Hello all, the company I work for recently called a meeting for all staff they informed us they are planning to shift us all from weekly to monthly pay. During the meeting I kept very quite as I didn't want to reveal any of my thoughts without cold hard facts.


Since then I have been in contact with HMRC and found out all the information regarding NI and the differences it will make to (all of us) I have made many calculations for both part time and full time members. The disturbing results are that most people with break even, 40hour week people will be 4p a year better off and 24hour a week people will be around £18-£19 a year worse off.


The most alarming part to me, Is instead of waiting a week in hand for any earnings, I will have to wait minimum 6 weeks extra per 4 week pay month more, That's a huge loss in potential interest, A loss for me and all my colleagues.


The company itself stands to make a lot of money from this going through, But it seems to be at the staffs expense, I am not against going on to monthly pay, But to be worse off for it, is a bitter pill to swallow.


I am planning on reading the contract tomorrow as I need to switch of a little this evening, Am planning a trip to citizen advice too.


Has anyone experienced anything like this, Or maybe some of the seasoned vets here could offer some words of wisdom?


any insight would be helpful.

mountainofdebt

tbh I'm not sure why anyone would be worse off .....the tax allowance would be the same as would the NI.

I have to admit that going from weekly to monthly can be a huge shock to the system but given sufficient notice it should be manageable.

Simon_Stir

mountainofdebt wrote: »

tbh I'm not sure why anyone would be worse off .....the tax allowance would be the same as would the NI.

I have to admit that going from weekly to monthly can be a huge shock to the system but given sufficient notice it should be manageable.

One would be worse off because the allowances are different for monthly and weekly... One can earn £153 a week NI free, With a low income you would just breech this amount on a weekly basis, but paying very little in NI. On monthly pay.. It all fine until you hit a 5 week month, the allowance is £663 NI free a month, but when you cluster 5 weeks the £663 is well and truly smashed, meaning you pay a lot more than you would on a weekly wage.


I have been monthly before, As I said that's not really an issue, What is an issue is, The company stands to make a lot of money from this change, But when you look at what the staff are going to lose, its at our expense.

mountainofdebt

Simon_Stir wrote: »

One would be worse off because the allowances are different for monthly and weekly... One can earn £153 a week NI free, With a low income you would just breech this amount on a weekly basis, but paying very little in NI. On monthly pay.. It all fine until you hit a 5 week month, the allowance is £663 NI free a month, but when you cluster 5 weeks the £663 is well and truly smashed, meaning you pay a lot more than you would on a weekly wage.


I have been monthly before, As I said that's not really an issue, What is an issue is, The company stands to make a lot of money from this change, But when you look at what the staff are going to lose, its at our expense.

well in my experience you wouldn't get 5 weeks wages in one month; your monthly salary would be 1/12th of your annual salary.

Simon_Stir

mountainofdebt wrote: »

well in my experience you wouldn't get 5 weeks wages in one month; your monthly salary would be 1/12th of your annual salary.

We remain hourly pay, not salary. There are of course 12 months/12 pay packets per year, if each one of them month's had 4 weeks in, it would be a 48 week year so four months will have 5 weeks pay in, Its these months that really push up the NI contributions, that weekly pay wouldn't do.

ViolaLass

You're still not going to get 5 weeks in a month. The most you would get is 4 weeks and 3 days.

Simon_Stir

ViolaLass wrote: »

You're still not going to get 5 weeks in a month. The most you would get is 4 weeks and 3 days.

You get more, pay day = last Friday of every month, cut off one week before hand. June 2015 for example cut off 18th, new month starts Friday the 19th payday 26th--- Julys 2015 payday is Friday the 31st, therefore cut off is the 23rd, 19th-23th 35days in length.

specialboy

OP, you need to check with your HR dept but normally monthly pay is 12 equal amounts and the cut off point is for overtime to be included. That's my experience and that of my brother in law anyway.

Simon_Stir

specialboy wrote: »

OP, you need to check with your HR dept but normally monthly pay is 12 equal amounts and the cut off point is for overtime to be included. That's my experience and that of my brother in law anyway.

I don't need to I have the pay calendar here in the information pack they gave us, My maths is solid.

HappyMJ

Simon_Stir wrote: »

You get more, pay day = last Friday of every month, cut off one week before hand. June 2015 for example cut off 18th, new month starts Friday the 19th payday 26th--- Julys 2015 payday is Friday the 31st, therefore cut off is the 23rd, 19th-23th 35days in length.

If they are paying 4 and 5 weekly then they'll use the weekly NI deduction rates and multiply by 4 or 5 so it won't make any difference. They should not be using the monthly NI deduction rates in that case.

amiehall

If the payroll is operated correctly, you will not pay any more or less NI than you were before so you should forget about that.

I guess it is annoying to wait longer for money. If you're experiencing a huge loss in interest on waiting an extra month for your wage, then I'd love to know where you're keeping your money!! I guess it depends how bothered you are by this. I would suggest it probably isn't worth damaging your relationship with your employer over. The problem with variable hourly pay is that you simply have to wait until after the end of the period to receive the money as people don't know what will be worked and then time for processing and payment is required. Possibly you could use this opportunity to negotiate a payrise. This would still ease the admin burden for your firm and wouldn't put you at a disadvantage.