Calculation of Gross Pay for starters/ leavers

Calculation of Gross Pay for starters/ leavers

Didn't find your answer?

I'm a little confused as I've just seen this done differently to what I thought was the norm.

I understood that for salaried staff (as distinct from hourly paid) the salary would be calculated pro-rata for starters and leavers.

I've just come accross an instance where starters (on salary) are paid actual hours in their first month - and this may also apply to the leavers last month.

Which is the correct method?
Are there any issues with the latter method? I thought perople were either one or tother.

And please could someone confirm what is the best way to calculate a pro-rata salary.

Suffering loss of confidence!

Many thanks
GG

Replies (4)

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By sburt
23rd Apr 2008 11:46

No right answer
Staff Handbbok 1st, then any reasonable method if not specified.
We use 1/260 for each working day
1/365 has the effect of paying someone 3 days for 1 days work if they start on the last friday of a month which ends on Sunday.
Splitting by actual month (i.e. 1/31 or 1/22) is fine, but more hassle if you have the calcualtion set up automatically.

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By User deleted
22nd Apr 2008 22:51

I don't think there is a 'correct' answer
unless the contract deals with it.

I tend to work out the number of working days in the month, then the number of days they have worked and pay the appropriate portion.

Eg. Started on 7 April, April has 22 working days (assuming full time Mon-Fri). Person has worked 18 days so pay 18/22 of a normal month's goss pay.

I've never had any queries. I think the main thing is that it is 'fair' and consistent.

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By AnonymousUser
22nd Apr 2008 14:12

What does Staff Handbook say?
What does the staff handbook say about salary payments for part months. The handbook often explains the basis on which employees will be paid in the month of joining and of leaving.

In my experience many different bases are used. There was a Thames Water case which said that salaried staff should be paid 1/365 th of annual salary for each day in the month they were employed and I have known this to be used eg start 22nd April be paid 9/365 th x annual salary. Some companies use 1/260th for each working day worked by salaried staff in month of joining or leaving, counting bank holidays as a working day. This is based on 52 weeks x 5 working days a week.

As to which is right, if either, this may be an employment law question.

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By edavis
19th Aug 2012 17:01

Leavers

Is it correct to re-employ a leaver to recalculate anything extra owed under old employee number on a payroll system or is it better to re start under another payroll number and put tax code to 0T and pay the difference?  

Regards

E Davis

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