Having employees start mid-month can be ideal if you’re really busy and desperate for help, but it can be a headache to work out how you should go about paying them. If your employee is paid ‘by the hour’ you will have already agreed the pay period, which may be something like ‘First to Last Calendar Day of the Month’, or another pay period. In the first month they will earn less as they have worked less hours, but after that the pay should regulate into a range, based on how the weekends are placed in the month. If your employee is paid a fixed monthly salary, there are a number of ways to calculate their pay. You must use 1 of 4 methods to calculate their daily pay and pay them for the number of days they’ve worked that month. Alternatively, Click Here to get more advice or call us on 01384 92 90 20.
Methods for calculating daily pay are:
- Salary divided by 12 (months in the year) and the divided by number of days in the month they start work with you – you will then pay them for the number of calendar days they have worked for you e.g. if they started work on 10th January, they should be paid for 22 days
- Salary divided by 12 (months in the year) and then divided by the number of working days in the month – you will pay them for the number of days they have worked e.g. if your employee works Monday to Friday, and started work on the 11th of January 2016 you would pay them for 15 days
- Salary divided by 365 (days in the year) – you will then pay them for the number of calendar days they have worked for you e.g. if they started work on 10th January, they should be paid for 22 days
- Salary divided by 260.71 (working days in the year, based on a five-day week) – you will pay them for the number of days they have worked e.g. if your employee works Monday to Friday, and started work on the 11th of January 2016 you would pay them for 15 days.
Depending on the number of days in the month, the days the employee works and where the weekends fall, each method can produce slightly different figures, making them either beneficial to the employer or employee. However, you cannot choose the most beneficial method each time. You need to select one method and use it consistently across the business and workforce. One Final Thing… The last thing to think about for a mid-month starter is the holiday year. If the employee is your first, starting the holiday year on the day that they start their employment is one option. When you add further employees to your team you can align their holiday year to the period that was defined for the first employee. Another, and the most regularly used, is to align it with the calendar year or financial year, regardless of the start date of your employee. If they’re paid by the hour their holiday entitlement will be accrued as they work. If they’re paid a salary the holiday entitlement calculation will need to be done based on the hours they work and the basis of the holiday year. Both the pay calculation and the holiday entitlement can be a challenge to get right if you’re new to being an employer. PayrollAbility manages holiday as part of the standard payroll service and will provide reports each pay period to help you keep track of your employees holiday position. The holiday entitlement can also be added to the payslip giving the employee opportunity to keep track of their holiday allowance. The employee self-service portal allows the employee to see holiday applied for, holiday authorised and request and cancel holiday. They will also be able to see the record of their sickness absence and any other absences, along with access their payslips and P60’s from previous years. The new starter salary calculation will be taken care of for you, and we’ll make sure we know what we need to know about your employees working pattern to ensure that holiday, sickness and absence is managed legally and accurately. We’re here to make having your first and future employees simple and stress free. Compliant payroll and auto enrolment, holiday management and knowing that you have the support you need with any payroll or employer related query means you can enjoy growing your business and focus on what’s important. And all that starts from £18.50 per month. Why not get in touch with us on 01384 92 90 20 or contact us here to discover how we can make becoming an employer simple.