I have an employee that started on 8/20/08. His semi-monthly rate is 5K for this example. What is the correct method to use to calculate his prorated pay for the 8/16-8/31/08 pay period?
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.
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.