The information posted on PayrollTalk is for informational purposes only and is not intended to substitute for obtaining accounting, payroll, tax, or financial advice from a professional accountant.

The information posted on PayrollTalk is for informational purposes only and is not intended to substitute for obtaining accounting, payroll, tax, or financial advice from a professional accountant.

## Comments

You pay the employee how many days he/she actually worked/came into work.

(Standard 2080 work hours in a year or 260 work days in a year)

$5,000.00 x 24 = $120,000.00

$120,00.00 / 260 = $461.54 per/day

(assuming weekends off) he/she physically came in for 8 days.

$461.54 x 8 days = $

3,692.32Or if you wanted to do it per hour:

$120,000.00 / 2080 = $57.69 per/hr

8 days worked x 8 regular hours = 64.00 hours worked

64.00 hours x $57.69 = $

3,692.16********** ********** ********** ********** **********

I do not understand the percentage method as Warren calculated, as it is not consistent and here is why:

Let's follow your semi-monthly pay-period (1-15 & 16-end).

Employee A and B will get the same annual salary of $360,000.00 or semi-monthly salary of $15,000.00

Employee A = started 08/15/08

Employee B = started 08/16/08

Both quit only after one day :lol:

Employee A will get 1/11 of salary = $1,363.64

Employee B will get 1/12 of salary = $1,250.00

So, some time in September, they compare pay checks :twisted: :shock:

They come back and claim we should have the exact same salary, as both did the same work (8 hours or 1 day), they should be equal salary, how do you explain?...?Employee A gets more because the moon is fuller mid-month :P

Let them compare all they want. :lol:

I multiply their salary and get an annual amount divide that by 2080 to get an hourly rate and then multiply that by the missed days in the period (assuming 8 hours per day) and subtract that from their salary for the missing days.

If they have only worked a few days in the period I get the hourly wage and multiply it by the days worked (8 hrs/day).

Example:

$120,000 annual salary

$5,000 semi-monthly salary

120,000/2080 (hrs/yr.) ~ 57.69 hourly rate

2080/24 pay periods ~ 86.67 hrs./pay period

An employee started 8/20/08

8/16-8/31/08 = 10 working days

(86.67/10)*8 days worked*57.69 hrly. rate = 4,000

This way, the hourly rate stays consistent which makes more sense to me.

To cross check, this is what I would do:

Let's say there is 8 pay periods left for the year.

semi-monthly salary * remaining pay periods

5,000*8 = 40,000

86.67*8 = 693.36 hrs.

40,000 + 4,000 earned on the 8/31/08 pay period = 44,000

(86.67/10)*8 = 69.34 hrs. worked per this pay period

44,000/(693.36+69.34) ~

57.69 hrly. rateThe rate above matches the hourly rate that is determined based on the annual salary.

I did not see anything in the initial post that indicates this employee is exempt - If we are discussing this under different assumptionss , it may be difficult to reach a conclusion. The method David cites is for Exmept employees - the hourly method works for non-exempt employees.

I have a question along these lines. What if when you do the calculation to prorate, the proration ends up being more than the semi-monthly salary? How would you handle?

If you are pro rating correctly(fluctuating daily rate) it shouldn't be more than the salary.

example -

you have an employee getting 3000.00 per SM pay period.

for the pay period of 1/1/19-1/15/19 there are 11 working days.

you would take the total salary(not the hours) of 3000/11days to get the daily rate of 272.73

you would multiply this daily rate by the number of days that the employee actually worked.

If there were 9 days in the pay period the daily rate would be 333.33

Since the number of working days in a pay period can be anywhere from 9 - 12 days this is why you can not prorate based on hours alone.