A wage rate is the agreed amount paid per hour to a person for carrying out work. It is the basic pay the worker receives, excluding holiday pay, pension contributions, other benefits and the employer’s additional labour costs.
In the UK, basic rates for many construction operatives are set by industry agreements such as the Construction Industry Joint Council (CIJC) Working Rule Agreement, subject always to the statutory minimum wage. For estimating and valuing daywork, the wage rate is only the starting point. The estimator builds it up into an all-in labour rate, which includes items such as:
- employer’s National Insurance and pension contributions
- holiday pay, sick pay and the CITB levy
- overtime, travel and non-productive time
- protective clothing and training
The all-in rate is considerably higher than the basic wage rate, so it is important to know which figure is being quoted.
Related terms: all-in labour rate, daywork, labour, productivity.
