Q: We have received an enquiry from one of our newly joined employees on the calculation of her monthly salary.
Below calculation by our payroll vendor:
Date of joining: 04-June-2024
Regular full time (37.5)
Annual Base: 170000
Total no of days worked in
June: 19 Days (incl 1 stat holiday)
June 2024 Gross: 12423.08
Regular monthly gross calculation: Annual gross/12
July 2024 Gross: 14166.67
The Employee has asked for a full explanation as to why the salary is so low for June when there is just 1 day deduction. We have tried explaining the logic and reason however doesn’t seem to be agreeing with this calculation. We also couldn’t find anything online to make the employee explain the standard way of calculating the pay but no luck.
Can you please suggest/provide some explanation around this situation and the calculation on monthly pay which we can provide to the employee
A: How a monthly salary is determined is based on an agreed term, there are no legislative requirements on how it is to be calculated. So, the first point of call will always be the employee’s employment agreement and if it states anything on how and what a monthly pay is based on. If not, you look at the policy or any letters provided to the employee. If not documented, then look at practice, if there is an accepted method that has been used. If you have nothing to fall back on it would be recommended to base a part month on actual days.
Your payroll system should not dictate how this is done it should be based on what was agreed.