There are many different types of day rate calculation methods you can use to calculate their team members’ day rates.
Day rate calculation methods
Method | Details |
260 working days per year | This method is based on a standard five day working week. |
365 days per year | This day rate is calculated by dividing a team member’s annual salary by 365. There is also the 366 version for leap years. |
Calendar day method | This method is different from the previous methods, as the day rate may vary each period. |
Use day rates within payroll
In Paycircle, if there's proration of a salary taking place, a team member’s day rate is used to work out their prorated pay for the period.
Note: Proration can occur for new starters, leavers, statutory schedules including, sickness, maternity, and paternity, salary changes, and back pay.
You may also require a day rate for certain additions and deductions. For example, overtime may be added as a number of days at a day rate, or unpaid leave could be deducted as an amount of missed days at a day rate. Certain elements in Paycircle are linked to rates held against team members. This means you can make changes using their calculated daily rate, which is worked out based on their day rate method.
Different day rate calculation methods
The 104, 156, 195, 208, 253, 260 and 261 working days per year methods will all calculate a team member’s day rate based on their salary / working days per year (e.g. 104). The team member’s pay in the period will then be calculated on the days worked. It is important to note that regardless of the method chosen, the days worked will always be calculated using a Monday to Friday pattern, and not the work pattern set in the team member’s profile.
e.g. A team member has a start date of 12th April. The pay period runs from 1st to 30th April 2023. They are on a £32,000.0 salary, and have a 195 working days per year day rate method. Their pay for April will be calculated as 32,000.00 / 195 working days per year * 13 days worked.
The 365 and 366 days per year methods will calculate a team member’s date rate based on their salary / days per year (e.g. 366). The team member’s pay in the period will then be calculated on the calendar days worked in the period.
e.g. A team member is on a £28,000.00 salary, with a salary change to £35,000.00 effective from 23rd May. The pay period runs from 6th May 2023 to 5th June 2023. They are on a 365 days per year day rate method. Their pay for May will be calculated as (28,000.00 / 365 days per year * 17 calendar days) + (35,000.00 / 265 days per year * 14 calendar days).
The calendar days method will calculate a team member’s day rate based on their salary in the period / calendar days in the period. The team member’s pay in the period will then be calculated on the calendar days worked in the period.
e.g. A team member has a leave date of 16th June. The pay period runs from 1st to 30th June 2023. They are on a £21,000.00 salary, and have a calendar days day rate method. Their pay for June will be calculated as 21,000.00 / 12 periods / 30 calendar days in the period * 16 calendar days worked.
The use work pattern method will calculate a team member’s day rate differently based on whether the company is set to use a pay period calculation or a calendar year calculation. With a pay period calculation, the team member’s day rate will be calculated based on their salary in the period / working days in the period based on their work pattern. With a calendar year calculation, the team member’s day rate will be calculated based on their salary / working days in the year based on their work pattern. With either method, the team member’s pay in the period will then be calculated on the days worked in the period based on their work pattern.
e.g. A team member has a maternity leave start date of 18th June. The pay period runs from 1st to 31st July 2023. They are on a £45,000.00 salary, have a use work pattern day rate method, and the company is set to use a pay period calculation. Their work pattern has Monday, Tuesday, Thursday and Friday as working days. Their pay for July will be calculated as 45,000.00 / 12 periods / 17 working days in the period * 9 days worked.
e.g. A team member has a maternity leave start date of 18th June. The pay period runs from 1st to 31st July 2023. They are on a £45,000.00 salary, have a use work pattern day rate method, and the company is set to use a calendar year calculation. Their work pattern has Monday, Tuesday, Thursday and Friday as working days. Their pay for July will be calculated as 45,000.00 / (4 working days per week * 52 weeks per year) * 9 days worked.