Hi
Normally I would pro rata pay for a leaver based on 260 days. So a client had a staff member leave at the end of June which is 65 days working days into the year. so 65/260 is 1 quarter, whcih accords with the 3 months of 12 they have worked. So you would expect that they should have been paid 1 quarter of their annual pay.
However the year 1st April 2019 to 31st March 2020 there are 262 working days (assuming monday-friday work pattern)
so the staff member hasn't quite worked 1 quarter of the year the have only worked 65/262 days. In all probability the employer will just want to pay the higher amount to the staff member but I wondered if this is actually a thing and in fact you *should* always use the actual working days in a year - or just remain consistent at 260 knowing that sometimes, yes theoretically the haven't worked the full quarter but best to favour the employee
thanks
Replies (10)
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We use 260 days for calculating extra days worked or whatever. But surely if the employee is paid monthly, and 'leave(s) at the end of June' you just pay a month's salary as normal?
There are no hard and fast rules - except maybe this:
How would you want to be treated as a leaver (or for that matter as a starter)?
Do that.
I always use 260 for part months worked.
There are some weird times of the year, (I had someone leave on 30th May one year, and (because of weekends etc) the days worked would have equated to more than a standard 1/12 of the year. In that case I deducted one day instead.
I agree with the others, I don't do any working back calculations to see the total number of days worked in a period.
After all, when does everyone's years start and end.
Would you need to base it on a calculation relating to the date the employee started working for you?
What about leap years?
At least by always using 260 I don't have to try and remember too much if someone asks a question down the line.
It's in our contract of employment, and we encourage clients to do the same with theirs, that one day's pay is calculated as 1/260 of the annual salary. Should stop any arguments.
However if somebody leaves at the end of a month I'd just pay the full month. Anything else would seem petty to me.
Depends on context. With 300+ employees (as in a previous employment) I would always work the same way, deducting days if required.
If I just had one employee at once, then I can imagine paying a full month in a lot of cases.
Why is 260 days used to divide an annual salary into a daily amount? You do not work 260 days as you will have say 10 days public holiday plus say 20 days annual leave. So this would be say 230 days meaning that the daily salary amount would be higher. It seems wrong to me to penalise employees if 260 days is used to calculate the daily amount for holiday pay on leaving an organisation.
Mainly because there are (generally / approximately) 260 days in a year excluding weekends.
Out of that the employee is also paid for a minimum of 20 days not to work.
Not convinced it is wrong nor that the employee is penalised.
There's a myriad of arguments around this issue but the 260 day approach is generally regarded as fair. That's the basis for paying holidays whilst they are employed, so sounds like a good basis for paying them on leaving.
You do not work 260 days as you will have say 10 days public holiday ........
There are two public holidays and six bank holidays. Eight in all.