Hourly Rates for Salary staff in Semi-Monthly pays
In the case of Weekly, Fortnightly and 4-Weekly pays, each Pay Period always has the same number
of days (7, 14, or 28) and the same number of Saturdays and Sundays. The number of hours in a
Period is always the same (eg 40, 80 or 160) and the effective “Hourly Rate” for salary staff will be
constant from Period to Period.
Semi-Monthly (and Monthly) pays are different. For Semi-Monthly the number of actual days in a
Pay Period can be 13, 14, 15, or 16; and the number of Saturdays/Sundays can be 3, 4, or 5. These
numbers change from Period to Period depending on months and leap-years.
Assuming 8 hours per day, the number of working hours in a Period will vary from 72 to 96 (33%!!).
Over the course of a year the average working hours per Period will be:
86.904758 assuming 8 hours per day and 365 days per year
86.964284 assuming 8 hours per day and 365.25 days per year
86.666667 assuming 8 hours per day and 52 weeks per year
For someone on a Salary of $5,000 (per Period), their effective Hourly Rate varies anywhere from
$52.05 to $69.44 from Period to Period. Average over a year will be $57.53.
This has implications when calculating Leave.
If an employee takes one week leave during a Period then the expectation is that their Gross Pay will
remain the same as normal – some will show as Leave and some as Salary. The implication is that
Leave for the Period should appear to be paid at the same Hourly Rate as the Salary. The effect is
that “one weeks leave” will be worth different amounts in different Periods.
Up until Ver 5.37, Plod has assumed the Hourly Rate for Leave (and other PayTrans) should be based
on the average 86.666667 hours per Period. The effect was that “one weeks leave” will be worth
the same amount in different Periods; but ”leave rate” does not appear to relate to “salary rate” in
any one Period. This is difficult to explain and causing some confusion.
Alternative
An alternative method is to ignore the 86.904758 average and use the actual number of working
hours in the Current Period. This will have the effect that:
a) “One weeks leave” will be worth different amount in different Periods (not that many folks
will notice).
b) Leave will appear to be calculated on the same basis as Salary.
c) Less confusion.
Effect on Accruals
The alternative has no effect on Accruals:
a) Accruals are valued at the “average” Hourly Rate based on 86.904758
b) Accruals are charged to the GL based on the amount actually paid during a Period
c) Accrual balances are stored as Hours and decremented by the physical hours actually taken
(irrespective of Hourly Rate.)
Change
The only change in Ver 5.38 is to use the technically more correct 86.904758 (instead of 86.666667)
as the average number of working hours in a Period. The alternative proposed has not been
implemented.