04 July 2008
Department for Innovation, Universities and Skills (DIUS)
 
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Pay statements. What they must itemise

URN No: 06/538

 

Contents

Introduction

This document outlines the provisions relating to itemised pay statements contained in employment legislation and explains how a complaint is settled. It gives general guidance only and should not be regarded as a complete or authoritative statement of the law.

Further information can be obtained from the Advisory, Conciliation and Arbitration Service (Acas) - see link on right hand side.

Outline of provisions

Most employees have a statutory right to receive individually, from their employers, a detailed written pay statement at or before the time of payment.

For information on how the law affects the way wages are paid and deductions made from wages, see 

Contracts of employment: changes, breach of contract and deductions from wages
Those not covered by the provisions

The provisions do not cover:

  • anyone who is not an employee, for example an independent contractor or freelance agent;
  • members of the police service;
  • merchant seamen; masters and crew members engaged in share fishing who are paid solely by a share in the profits or gross earnings of a fishing vessel.

What the itemised pay statement must contain

Every pay statement must give the following particulars:

  • the gross amount of the wages or salary;
  • the amounts of any fixed deductions and the purposes for which they are made (for example, trade union subscriptions, or the total figure for fixed deductions, when a separate standing statement of the details has been provided (see below);
  • the amounts of any variable deductions and the purposes for which they are made;
  • the net amount of any wages or salary payable;
  • the amount and method of each part-payment when different parts of the net amount are paid in different ways, for example the separate figures of a cash payment and a balance credited to a bank account.

Note: It is not necessarily possible to work out a worker's hourly rate for the purposes of the National Minimum Wage on the basis of this information. Workers who want advice on calculating their hourly rate should call 0845 6000 678.

Two types of pay statement

An employer may choose to give either:

  • a pay statement which specifies the amounts and purposes of every fixed deduction separately; or
  • a pay statement which specifies only the aggregate amount of all fixed deductions without any explanation of their purpose; but in this case the employer must give the employee a standing statement of fixed deductions (see below) at or before the time when the pay statement is issued.

Rules when a standing statement of fixed deductions is used

  • It must be in writing.
  • It must state for each item deducted:
    • the amount;
    • the intervals at which the deduction is made;
    • the purpose or description, for example trade union subscription.
  • It must be given to the employee at or before the time of issuing any pay statement which quotes the total figure of fixed deductions.
  • It must be re-issued at intervals no longer than 12 months, incorporating any amendments.

Changes in fixed deduction statements

If there is any change at all which affects an employee’s fixed deductions, the employer must give the employee either:

  • a written notification of the details of the change; or
  • an amended standing statement of fixed deductions, which is then valid for up to 12 months before re-issue.

Complaints about itemised pay statements

Applications may be made to an employment tribunal by:

  • employees, if their employers fail to provide itemised pay statements, for a decision on what particulars ought to have been included;
  • employers or employees, if a question arises on statements issued, as to what particulars ought to have been included in a pay statement or a standing statement of fixed deductions.

Note: An employment tribunal cannot deal with a question relating only to the accuracy of an amount stated in any particulars.

Making an application to an employment tribunal

An employer seeking a decision, or an employee who considers that an employer has failed to comply with the provisions described in this document, may apply to an employment tribunal within the time limit below.

Anyone who wishes to complain to a tribunal may obtain an application form ET 1 or ET 1 (Scot) which is included in the explanatory leaflet Making a claim  to an employment tribunal available from Jobcentre Plus offices, Citizens Advice Bureaux, from the DTI Publications Orderline on 0845 015 0010, or from the Employment Tribunals Service website.

Time limit

If employment has ceased, any application must be made within three months of the date when it ceased.

Conciliation

The tribunal will send a copy of the completed application form to a conciliator of the Advisory, Conciliation and Arbitration Service (Acas), who will attempt to settle the complaint by conciliation without the need for a tribunal hearing. The services of a conciliator will also be available in the absence of a formal complaint, at the request of the employee or employer. They can get in touch with a conciliator through one of the main offices of Acas.

Information given to a conciliator in the course of his or her duty will be treated as confidential. It may not be divulged to the tribunal without the consent of the person who gave it.

Tribunal hearing

Where conciliation does not take place or fails, the tribunal will hear the complaint. Both parties should attend and may claim travelling and other expenses, including loss of earnings. Tribunal proceedings are conducted informally and in such a way as to make it easy for applicants to conduct their own case if they wish. The parties may be represented by anyone they wish, including a representative of a trade union or employers’ association.

Compensation

Compensation payable by the employer may be awarded to an employee by an employment tribunal at its discretion if it finds that unnotified deductions of pay have been made, that is, deductions which did not appear on a pay statement or a standing statement of fixed deductions.

The discretionary amount awarded will not exceed the total of the unnotified deductions during the 13 weeks immediately before the date the application was made to the employment tribunal.

All unnotified deductions enter into this calculation, whether or not they were made in breach of a contract of employment.

Dismissal for seeking to enforce the right to an itemised pay statement

Dismissal of an employee for seeking to enforce the rights described in this document, either by making a reference to an employment tribunal or by alleging that the employer has infringed those rights, is unlawful. An employee dismissed in these circumstances is entitled to make a complaint of unfair dismissal to an employment tribunal, regardless of length of service. This applies whether or not the employee did in fact qualify for the rights in question and whether or not they had in fact been infringed, provided that he or she acted in good faith. A complaint of unfair dismissal must normally be made within three months of the date on which the employee’s employment ends - see

Unfairly dismissed? - Regulatory Guidance, irrespective of whether an internal appeals procedure is used.

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