Pro-Rata Calculation of Basic Hours on Termination or Engagement
The basic hours and pay of an employee who is terminated or engaged within the pay period will be calculated pro-rata, based on the working days within that period.
For example, if an employee works a 40-hour week basis when paid monthly, this would amount to 173.33 hours. However, if an employee on the same contract is engaged on 18th January 2021, then, the basic hours would be calculated as:
worked days ÷ working days in pay period x basic hours in pay period
In this case, then, this would be calculated as:
10 ÷ 21 x 173.33 = 82.54 hours
The same calculation would be applied to the basic pay value. If the monthly salary is equivalent to €2000, then this month's basic pay would be:
10 ÷ 21 * €2000 = €952.38
Paying Exact Hours
There are circumstances where you would prefer to pay exact hours worked for employees on engagement and termination. For example, if an employee worked 10 days, you might prefer to pay exactly 80 hours based on the agreement. If this is so, this can be changed from the Payroll Calculation Options in the Company Settings.