Pay for 1 month & 5 days

olmotorsolmotors New MemberRegistered Posts: 14
Hi all,

I am helping my church with the payroll for a new employee.

They started employment with the church 1/7/13 and will be paid in arrears 1/8/13 and the 1st of every month thereafter.

What is the correct way to calculate the first 5 days which will be included with this payment?

My thoughts are salary divided by total working days in year multiply by working days in period (5). Is this correct?

Any answers would be much appreciated.

Comments

  • payrollpropayrollpro Trusted Regular Hampshire/SurreyRegistered, Working Together with HMRC Posts: 418
    There are actually quite a few ways to do this, called apportionment of pay. First off I'd like some more information. You say they are to be paid on the 1st of every month, so calendar monthly paid, I assume. If they started on 1st July then surely on 1st August they have a full months pay, whatever that may be. From your message I am guessing they work approximately one day a week, hence the five days, would that be right? where I am struggling to understand is the reference to 1 month and 5 days. This does not fit with the information.

    Assuming I am right you need to know the value of a weeks/days pay for the purposes of payment. Idealy this information would be contained in the terms and conditions of employment whcih have to be issued within eight weeks of starting the job. Generally it is a good idea to include the method by which the employer is going to calculate part period payments. Another source of information is the Employment Rights Act 1996, sections 220 to 229 and if there are no T's & C's to work from then the act takes precedence.

    There is nothing wrong with annual salary divided by total working days in year and then multiplied by 5, it's as good as any other method. Try salary divided by 12, for the relevant month but then divide down by the total working days in that month and multiplied by 5, that would be a bit more accurate.

    All I can say is that whatever method is used the church must be consistent and use the same method of calculation for payment as it does for recovery of any overpayments and consdier setting it down on paper as a condition of service, that way there are no inconsistencies or risk of different treatment when someone new comes along.

    Payrollpro
  • olmotorsolmotors New Member Registered Posts: 14
    Thanks Payrollpro,

    The first payroll run being the 1st August would be for 1st July to 5th August. Hence 1 month and 5 days. Then the usual 6th-5th thereafter paid the 1st of each month.

    I will try to get a copy of their T's & C's and see if anything is mentioned in there.

    Thanks again.
  • payrollpropayrollpro Trusted Regular Hampshire/SurreyRegistered, Working Together with HMRC Posts: 418
    I am puzzled why they want to complicate things by mirroring the tax month but I can see that with a 1st pay day that's probably why. Personally I would have gone for a 1st to 30th (etc) and paid on the 30th and that would have got over the whole problem.
  • coojeecoojee Experienced Mentor Registered Posts: 794
    I'm puzzled as to why they're being paid for days they haven't worked yet, ie 1st to 5th August. If they were off sick or did overtime or anything else that required adjustments then it would have to wait until the September pay day to be sorted out. Seems a bit odd to me and makes life far more difficult than it needs to be. I can understand paying on the 5th for the previous calendar month but paying in advance seems weird.
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