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What is shift allowance?
A shift allowance is an extra payment that employees get for working unsociable hours outside the regular 9-to-5 workday.
This could be in the evenings, overnight, at weekends or on public holidays. It’s a way for employers to compensate their staff for working awkward or inconvenient hours, as well as incentivise them to work those shifts.
Shift allowances vary widely based on things like:
- The time of day the shift takes place
- The type of work being performed
- The industry or sector
- Company policies and agreements
Types of shift allowance
There are all sorts of shift allowances that employers use to compensate and motivate their staff. These are some of the most common:
Night shift allowance
This is for employees working outside standard daytime hours, typically between 6pm and 6am - though this will depend on the employer.
Weekend allowance
Generally found in industries like healthcare, retail and hospitality, a weekend allowance makes up for employees having to work when most people are off.
Holiday shift allowance
Many businesses are open on public holidays, and a holiday shift allowance is for staff who are needed on those days to keep the business running.
Rotational shift allowance
This is for workers who are on rotating shifts, such as alternating between day and night shifts, to compensate for the physical toll this can take.
Overtime allowance
OK, so this one’s not strictly a shift allowance, but the principle is the same - overtime pay is generally higher to make up for employees working outside their traditional hours.
Why offer shift allowance?
Though potentially expensive, there are lots of reasons why employers offer shift allowances to their workers. These include:
- Attracting workers for specific, hard-to-fill shifts
- Hold on to workers and improve staff retention through added incentives
- Keep up productivity and ensure there are staff working around the clock
- Boost morale and employee satisfaction
How shift allowance is calculated
Each employer will calculate the shift allowance they offer differently, but some of the most common ones are:
Flat amount
This is a set amount of money added to an employee’s wages for working a particular shift or particular hours. For example, an employee might get an additional £2.50 per hour for any shifts worked after 6pm.
Percentage of normal wages
Some businesses calculate shift allowances as a percentage of an employee’s regular pay. For instance, an employee may receive 10% more than their regular hourly rate for night shifts.
Fixed rate for specific shifts
Rather than making a calculation related to wages, some employers choose to simply offer a fixed rate for certain shifts. A night shift might pay an extra £50 per shift, for example, or a weekend shift might pay an extra £25 on top of the standard rate.
Overtime rate
A rate for working beyond an employee’s normal working hours, over holidays or during designated time off. This is generally 1.5 times or double someone’s normal hourly rate.
Read more: How to create a payslip
Is shift allowance mandatory?
Whether a shift allowance is mandatory or not depends on things like employment contracts, industry regulations, and union agreements. In some industries, shift allowances are required by law, while in others they’re offered at the discretion of the employer.
It’s important for employees to check their employment contracts to understand the specifics of any shift allowance policies. Employers are generally expected to clearly outline how shift allowances are paid, when they apply, and whether they are guaranteed.
Make the shift today
Shift allowances or not, Planday can help you create smart shift schedules that work for everyone. Give it a try for free and see how.
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