For a very long time, people have been asking me to add a pro-rata tax calculator to The Salary Calculator – I have finally created it and added it to the site. As I have mentioned in an earlier post, pro-rata salary is normally calculated quite easily. For reduced hours, most employers will multiply the full-time salary by the reduced number of hours divided by the full-time hours.

For example, if the full-time salary is £20,000 per year for 37.5 hours’ work per week, the pro-rata salary based on a 18-hour working week would be:

£20,000 x (18 / 37.5) = £9,600

Income tax, National Insurance and other deductions are then calculated based on this new salary. To use this new tool, you just need to enter the full-time salary, the full-time hours, and the new hours that the pro-rata salary is to be calculated from. To check it out for yourself, get started with the pro rata Salary Calculator.

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7 Comments to Pro-rata Salary Calculator added

  1. Hi a good addition to the calculator would be adding sick days so you can see the effect of unpaid sick days has on take home pay.

  2. Mark on April 9th, 2012
  3. Hello,
    I was wondering if you could explain whether my employer has calculated my mid month salary adjustment correctly, as I do not agree with the method used.

    The following calculation shows how November’s Reference Pay was calculated by the company’s payroll. The calculation did not reflect actual hours/days worked (100 hours/14 days) in November and therefore resulting in underpayments.

    Step 1
    A salary of £12542.61 has been paid to reflect increased hours from 14.5 a week to 35.5 a week.

    Step 2
    Oracle Software used by the company has paid one twelfth of the increased salary which is £1045.24 a month (12542.61/12 months).

    Step 3
    The company had to calculate how many days need to be paid on the old shift (Weekends) by using the following process:

    a. Work out the difference between increased Annual Salary and old Annual Salary
    £12542.61 increased salary – £5119.66 old salary = £7419.68 adjusted Annual salary

    b. Then the formula below had to be used in order to calculate how many days needed to be paid on the old salary

    Adjusted Annual Pay x Actual Days worked on the Weekend Shift
    Number of working days a year

    • Annual Adjusted Pay £7419.68 (£12534.34 – £5119.66)
    • Number of working days a year (Weekend Shift) 104
    • Actual Number of Days worked 6

    So,
    £7419.68 x 6 = £428.06 is the amount that needs to be paid on the old salary
    104
    Step 4
    The amount needed to be paid on the old salary is then deducted from the new monthly salary in order to arrive to the final Reference Pay for November, as follow:

    £1045.24 new monthly salary – £428.06 amount paid on the old salary = £617.18 a new Reference Pay for November

    I do not agree with this method because it did not reflect the number of hours/days worked and the followings shows how I dispute their calculation:

    1. The adjusted figure (£7419.68) used to work out days to be paid out on the old salary is wrong as it does not represent correct amount earned on a day. The amount earned per day using this figure is £71.34 per day (7419.68/104 days) which is higher than the actual amount employees received per day £49.22 (6.79 per hour x 7.25 hours per day). Hence, there is an extra of £22.116 (71.343 – 49.227) added to the daily pay which is not given and therefore contribute to this underpayment.

    Note: In order to arrive to the correct value for those 6 days worked on the Weekend Shift, correct Annual Salary should be used and in this case the figure needed is the Annual Salary from the Weekend Shift (£5119.66)

    2. The actual Monthly Reference Pay based on adjusted annual wage of £7414.68 would work out as £617.18 a month (£7414.68/12 months) without using the formula. This amount represents only 91 hours or 12.5 days a month (£617.18/£6.79 per hour) whilst the actual hours worked from 01st to 30th November 2012 were 100 hours or 14 days (29 hours on the weekends + 71 hours on the nights). Therefore, 9 hours or 1.5 days (100 – 91) has not been included in November’s Reference Pay.

    3. The deduction amount of £428.06 for the actual 6 working days on the weekend shift exceeded the actual amount of the Reference Pay that is given (£426.64) monthly for the Weekend Shift employees. Therefore, the calculation done is clearly wrong and does not represent true value of those days.

  4. Pablo on March 13th, 2013
  5. Hi Pablo,

    Thanks for taking the time to write such a detailed message! Unfortunately I don’t think I can give you a categorical answer, because I don’t know enough about the situation and how your employer does their calculations. However, here are a few thoughts I had while reading your comments:

    • They aren’t going to try to deduct the old salary from the new one – like you said in your note in point 1, the right way to do that would be to use the Weekend Shift salary (£5119.66). Even if they used that number, though, it wouldn’t be the right approach – if you consider someone moving shift from earning £1000/month to £1100/month, you wouldn’t expect them to get paid just £100 in the month they move. You would expect them to get paid somewhere between the two, in proportion to how early in the month they moved to the better-paid shift. This is why the calculation starts off deducting the old salary from the new.
    • For the same reason, you wouldn’t expect the amount deducted to match the amount paid for the old shift, as you imply in your point 3. The amount deducted is related to the difference between the two salaries, and since the new salary is more than twice the old one, this amount could be more than the original salary.
    • With regards to your point 2, most salaried people get paid the same amount each month (salary / 12, as you pointed out in your calculations), even though different months have different numbers of working days. For example, this year someone working Monday-Friday will have worked 20 days in February but will work 22 in April. It is therefore not unusual for the salary to be different from the number hours worked in that particular month multiplied by the hourly wage.

    In my experience, when someone’s salary changes part of the way through the month, their salary that month gets some of the increase in proportion to when in the month their salary changed – 100% if it changed on the first of the month and only about 5% or less if it was on the 31st. With some rough calculations, the salary you received in November (£617.18) would suggest you changed shift on about the 20th.

    I should say, though, that different employers are likely to do this calculation in different ways so if you think they have got it wrong your line manager, HR or payroll department should be able to talk you through it. If you still think that they have made a mistake then Citizens Advice should be able offer advice.

  6. admin on March 13th, 2013
  7. Please do monthly salary cover weakend days as well

  8. eve on March 12th, 2014
  9. Hi Eve,
    Could you give me a bit more information about what you want to work out? Is it overtime at the weekend, or different shifts or something? Let me know what you’d like to see and I’ll try to add it!

  10. admin on March 14th, 2014
  11. How do you work out 4 on 4 off monthly income

  12. Erika Williams on September 19th, 2016
  13. Hi Erika,
    I imagine that your monthly income changes depending on how many days you work in a particular month? I’m afraid I can’t think of a good way to work it out using The Salary Calculator – all of the options that might help are based on weeks rather than months. I suggest you ask your employer if they can tell you more about how they work it out – this might help you to figure it out.
    You will get a pretty good idea if you work out your total pay for the year and simply enter that as the salary on the take-home pay page – this will show you the annual amount and the average amount each month. If the number of days you work each month affects that month’s pay, it will vary a little around that monthly amount.

  14. admin on September 20th, 2016

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