Permanent salaried staff
Salaried staff receive their contracted salary regardless of how many hours they work in any given week — up to their contracted limit. The calculation is straightforward: monthly salary paid monthly via payroll, with any overtime or additional hours handled per your company policy.
Where errors creep in for salaried staff: part-month adjustments for starters and leavers, statutory deductions during sick leave, and enhanced entitlements like company sick pay. Your payroll software should handle most of this, but it needs to be set up correctly for each contract type.
Zero-hours and casual hourly workers
Casual workers are paid for actual hours worked at their agreed hourly rate. This sounds simple but involves several moving parts:
- Actual start and end times — not scheduled hours. A worker who was scheduled for 6pm–11pm but clocked out at 10:40pm is paid to 10:40pm.
- Break deductions — if you have a break policy that includes unpaid breaks, these need to be accurately recorded and deducted.
- NMW compliance check — the calculated hourly rate must be at or above NMW for the worker's age band (£12.71 for 21+ from April 2026) for every pay period. This is not just an annual check.
- Holiday pay accrual — as the worker accrues hours, they are building entitlement to paid holiday. This needs to be tracked against each worker using the 52-week average method.
The most common error with casual pay: Paying based on scheduled hours rather than actual hours. If a worker starts late or leaves early and you pay the scheduled shift, you are overpaying. If they stay longer and you pay the scheduled shift, you may be underpaying against NMW and creating wage claims. Always pay actual hours.
Different pay rates within the same team
A typical mixed team might include chefs paid at £15/hour, floor staff at £12.71, and kitchen porters at £12.71 — with different age bands and associated NMW minimums across the group. Managing this manually creates errors. Your payroll process needs to map each worker to their rate clearly, with the NMW minimum as a floor on each calculation.
| Worker type | Pay basis | Holiday method | Common errors |
|---|---|---|---|
| Permanent salaried | Monthly salary / contract | Days recorded; pay unchanged | Part-month calculations, sick pay |
| Zero-hours / casual | Actual hours x hourly rate | 52-week average OR 12.07% rolled-up (both lawful from Jan 2024) | Scheduled vs actual hours; wrong method for worker type |
| Agency workers | Agency invoice (per agreement) | Agency responsible | Assuming agency handles NMW; no records |
Agency workers
Agency workers are invoiced by the agency, not paid directly by you. The agency handles payroll, NMW, SSP, and holiday pay for their workers. Your cost is the invoice total — typically the worker's pay rate plus the agency's margin (usually 25–35%).
You do not calculate wages for agency workers, but you do need to keep records of their hours on your site for ERA 2025 compliance purposes — particularly for the guaranteed hours right coming in 2027. Track which agency workers work at your site, on which dates, and for how many hours.
Making the reconciliation manageable
Weekly wage reconciliation for a mixed team of 20+ workers is a significant time commitment if done manually. The businesses that handle it most efficiently are those where actual clock-in and clock-out data feeds directly into a wage calculation tool — eliminating the step where someone re-enters timesheet data into a spreadsheet.
FlexiWork's Wages module does this automatically. Every shift clocked through the platform produces a payroll-ready record, segmented by worker type and pay rate, that can go straight to your payroll provider. The manual reconciliation step largely disappears.
Automated wage calculation for mixed teams
FlexiWork calculates wages from actual hours, by worker type and rate. ERA 2025 records built simultaneously. 30-day free trial.
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