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
An employee who works 21 hours per week on a monthly rate of pay is set up as follows:
A normal (full) working month would display in a pay run as shown below:
The employee is paid 1 unit of their monthly salary of $2,300. If the employee only works a partial month, due to unpaid leave or starting/terminating employment the pay run will still display 1 unit, however the rate will be a calculated (pro-rata) value, as shown below:
The '?' icon shows the rate has been calculated, and displays the following information:
This employee would normally work 14 days per month and this month they only worked 8 days. The result is calculated as (base rate of pay / number of working days in month) X number of days actually worked. Again the '?' icon displays further information when selected:
The calculated rate can be overriden by selecting the 'Override' check box:
An employee with an hourly rate of pay, will be set up as follows:
A normal (full) working month would display in a pay run as shown below:
The 86.66667 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 20 (20 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 40 (20 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 15th June and the pay period ran between 1st June - 30th June, the employee's hours are calculated as follows in the pay run: number of days worked in pay run for employee X number of hours worked each day; 10 days X 5 hrs = 50 hrs. The calculation assumes the days worked each week are Monday - Thursday. If the employee had advanced work hours set up it would identify the actual work days for the employee.
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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