How To Calculate a Prorated Salary,
How To Calculate a Prorated Salary
Whenever a contracted employee, that usually enjoys a monthly or contractual rate, works for a string of days that does not complete a wage cycle stipulated on the contract, a prorated salary is usually given as compensation for the work done during those days. The salary given to you will be based on a computation for your daily rate in relation to the rate stipulated on your contract, whether it is monthly or project based. To make everything more understandable, let’s say that you are given $2000 for a total of 26 days of work every month. Now, for this month, you only worked 10 days instead of the total 26 days you are contracted to work for. Obviously, your employer is not liable to pay for the total amount of $2000 (unless agreed upon in the contract). So since, you only worked 10 days, you should only receive 10 days worth of salary. Now, to compute this, here is a short process you can follow using the example given.
Knowing how to compute for prorated salaries is quite critical in running a business since you never want to be paying more than what your employees work for. At the same time, it is a crucial tool to pay an employee his increased wages should the change of compensation changes mid-month or year.
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