Money Advice Service

Whether it’s a part-time job during your studies or your first full-time job, earning your own money is extremely rewarding. How you’re paid for your work and when you’re paid can vary considerably – we look at the different ways employers pay their staff.

How will my pay be worked out?

The money you get paid for work can be calculated in a number of different ways by your employer.

Type of pay Meaning
Salary The amount of money you would earn in one year. This is usually based on working a certain number of hours each week.
Hourly rate You earn a set amount for every hour that you work. The more hours you work the more pay you’ll receive.
Piece work There are some jobs where you’re paid a set amount for every unit you produce. The more units you produce the more you’ll be paid.
Commission Mostly linked sales jobs. You receive a share of the sales you make. Commission is often paid in addition to a salary or hourly rate.

Minimum Wage and National Living Wage

Check to see if you’re receiving the minimum wage with the GOV.UK minimum wage calculator.

The Minimum Wage is the minimum pay per hour that any worker should get.

The amount varies depending on your age and whether you’re doing an apprenticeship.

There is no minimum wage for workers younger than the compulsory School leaving age.

National Living Wage

If you’re employed and aged 25 or over and not in the first year of an apprenticeship, you’re legally entitled to the National Living Wage.

Find an updated list of the National Minimum Wage and National Living Wage on the GOV.UK website.

How you get paid at work

Some employers might pay you in cash, but the most common way of receiving your wage is through your bank account.

This has the major benefit of being safe and secure.

One other major advantage of being paid directly into your bank account is that your employer should enrol you into a scheme called Pay As You Earn (or PAYE for short).

This means that your employer automatically takes away any Income Tax and National Insurance contributions from your wage before it’s sent to your bank account, meaning you don’t have to worry about making tax payments.

When will you get paid

When and how often you get paid is usually agreed between you and the employer before you start the job.

Although wages are typically paid monthly, it can be weekly or even daily and should be stated on your employment contract.

Other work benefits

Employers might provide other benefits in addition to your pay, for example:

  • Health insurance
  • Accommodation
  • Company car
  • Gym membership

These are called ‘benefits in kind’ as you’re not getting extra cash, but are getting something you would normally have to pay for.

You still have to pay tax on many benefits in kind.

Learn more from our guide on Cars, insurance and other employee benefits.


Are you 21 or under? Read more about Automatic enrolment if you’re 21 or under.

If you take a workplace pension out, every month a small part of your wage will be paid into your pension.

The advantage of a workplace pension is that your employer will also make a payment each month.

On top of this, any payments you make into your pension are tax-free.

The government has introduced a new rule which means employers will automatically place workers into a workplace pension scheme.

This article is provided by the Money Advice Service.