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Calculating day rate from annual salary

  • Fellow
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  • 30 posts
  • # 112635

I hope someone can help my poor tired brain!

 

Calculating day rate from annual salary:

 

How do I do it? ACAS and HMRC both say they can't help me.

 

Do I use the 260 working day method or 365 day method? Employee will get paid more on 365 method which would make sure there could be no come back but I know 260 is the most common method. 

 

Not enjoying this connundrum!

 

  • 115 posts
  • # 112636

If they work a 5 day week then they work 260 days in a year.

Steve

  • Associate PM.Dip
  • 1 post
  • # 112637

If they work five days a week, you divide the annual salary by 52 (weeks of the year), then divide that by 5 days a week.

  • Fellow
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  • 30 posts
  • # 112638

Thanks Steve, I am aware that a 5 day week equates to 260 working days a year. My query was which method is deemed to be the right one to use, dividing annual salary by 260 and multiplying by working days in a month or dividing by 365 and multiplying by total days worked including weekends.

I have a salaried employee who has had a pay rise applied on day 14 of a month and I have to work out pay on the old rate up to that day and the new rate thereafter. Ordinarily annual salary is divided by 12 and the same paid each month.

It would seem you have to make your own mind up on the situation and then be consistent. Another fantastically woolly area of payroll, I fail to understand why HMRC can't make one way or the other obligatory and save us all a lot of confusion and possible backlash from disgruntled employees who don't like the way that particular employer has decided to deal with it.

There is probably no one correct answer here, just interested in other people's views. I have gone for the 260 method.

 

 

 

  • Member PM.Dip
  • Practice Licence
  • 779 posts
  • # 112639

Hi,

I use this:

http://www.salaryconverter.co.uk/

Marilyn

  • Fellow
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  • 30 posts
  • # 112640

Thank you all :)

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