When an employee is setup to be paid a certain number of hours by default (via their Pay Run Defaults page) these hours will appear automatically in the pay run. This article explains how pro-rata hours are calculated in a pay run, dependent on whether an employee has basic or advanced standard work hours set up by default in their settings.
Pro-rata hours and basic standard work hours
A part time employee is engaged to work 21 hours per week and is accordingly set up as follows:
The employee is paid on a monthly basis and so their hours automatically display in the pay run as follows:
The 91 hours is determined by multiplying the employee's standard weekly hours by 4.33333 (being the average number of weeks in a month over an annual period). If the employee was paid on a weekly basis the hours in the pay run will automatically display as 21 (21 hours per week x 1 week). If the employee was paid on a fortnightly basis, the hours in the pay run will automatically display as 42 (21 hours per week x 2 weeks).
Staying with the monthly pay example, if this employee commenced employment mid-pay period, the hours automatically shown in the pay run will be calculated on a pro-rata basis. For example, the same employee commenced employment on 9th July and the pay period ran between 1st July - 31st July, the employee's hours are calculated as follows in the pay run:
Remember this employee's standard monthly hours are 91. How do we get a pro-rata value of 67.52 in this example? The calculation is as follows:
- number of days worked in pay run (assuming all week days and weekends worked) / total number of days in pay run; 23 days/31 days = 0.74193548
- multiply above result by number of hours worked in pay run (using the hours worked in a complete pay run); 0.74193548 x 91 hours = 67.51613 hours.
The same calculation is used to determine the pro-rata hours paid when an employee terminates mid-pay period.
Pro-rata hours and advanced standard work hours
A part time employee is engaged to work for 34 hours a week on agreed days, as follows:
The employee is paid on a weekly basis and so the employee's normal pay will automatically be calculated as follows:
The employee's pay is basically a copy of the standard work hours set up in their Pay Run Defaults screen.
If the employee commenced mid-pay period however, the hours will calculate on a pro-rata basis. That is, the employee's advanced standard work hours will only be applied from the employee's commencement date. For eg, the employee commenced employment on 30th August and the first pay run for the employee was for the period 27th August - 2nd September. The employee's pro-rata hours appear as follows in the pay run:
The same philosophy is used to determine the pro-rata hours paid when an employee terminates mid-pay period.
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