Pro Rata.

student87

I have been trying to work out my pro rata for a salary of £16,000.

Can someone help please?

Have looked online , but I always end up with two different answers, either £61.30 / £61.50 odd.

I need to work out a daily rate as I need to produce an invoice myself.

Many Thanks.

dmg24

Assuming you are working five days each week, then you need the following calculation:

5/7 x 365 = 260.71429

16000/ 260.71429 = 61.37

That does not take holiday pay into account, but if you are invoicing I assume you are not entitled to it.

dugdale_2

I see your problem as I would have said

weekly rate works out as £16000/52= £307.69
daily rate works out as £307.69/5 = £61.54

edit
however that assumes that there are 364 (52 X 7) days in a year which as we all know is incorrect so I'd take DMG24's figures as being correct

getmore4less

It depends what you really want to work out and that may depend on the hours you do, if they are fixed then a daily rate may be OK if variable you may want to look at an hourly rate.

For a normal employee doing X hours a week on a salary then a very close approximation for an hourly rate is

salary/(52*X)

so for a 7.5hour day £16k/(27.5*52) £11.19ph.

For a daily rate on a 5 day week thats £61.54pd

But this includes holiday pay of at least 5.6weeks(28days) often more.

So if you want to include that in your daily rate then you need to do the £16k over the shorter time so £68.97pd

Why not just charge £70 a day is close enough.


I find this a usefull link for the holiday part of the calculations
http://www.direct.gov.uk/en/Employment/Employees/Timeoffandholidays/DG_10034642

to include holiday pay they use a boost of 12.07% so that would be £68.97 based on a 52week 5day week.


Also don't forget if you are invoicing then the employer also has no NI to pay so thats another factor to increase the daily rate,

I have no idea how that works my quick look at HMRC site did not help.

student87

Thanks for your input all!

I need to work out a daily rate -The leap year is confusing me!

I work 8 hours per day , 9 - 5, including one hour lunch.

I'm assuming I get paid for my lunch hour!

Holiday entitlement won't come into it due to the short period of work! / invoicing.

Re: Dmg's figures: Would not I need to take 365 - 104 (ie the weekends) to calculate the 5 working days first.

Can a daily rate / hourly rate be worked off for me? I hate figures.

LittleVoice

Back to the need for this daily rate business.

If you are invoicing, you are self-employed (or the company which is raising the invoice is employing you). I assume it is the former and you are not using an umbrella company.

How is the figure of £16,000 pa arrived at? Who is setting it and why?

I think the answers to those questions will help decide whether you should really be charging more than a straightforward pro rata sum.

student87

Thanks for your contributions, little voice.

I recently opened a a ltd company.

Where I am working, I was told I would be paid £16 k pro rata, and to provide an invoice myself from my company and work out the tax contributions etc myself.

So, I own A ltd, but am currently sub contracted to work for B ltd, if this all makes sense.

I'll admit, I have very little idea - I am very new to all this.

getmore4less

student87 wrote: »

Thanks for your input all!

I need to work out a daily rate -The leap year is confusing me!

I work 8 hours per day , 9 - 5, including one hour lunch.

I'm assuming I get paid for my lunch hour!

Holiday entitlement won't come into it due to the short period of work! / invoicing.

Re: Dmg's figures: Would not I need to take 365 - 104 (ie the weekends) to calculate the 5 working days first.

Can a daily rate / hourly rate be worked off for me? I hate figures.

If it is fixed hours then the lunch is irrelevent for daily rates

If the £16k is the normal rate for the fulltime job then the daily rate should be boosted by 12.07%(even if just working 1 day) to account for holiday entitlement.

Why not just say you want paying X per day, I would go for around £80 to take account of the holiday and employee NI savings.

fermi

(£16,000 / 365.25) x (7/5) = £61.33

(averaging out over leap years)

But that is a physicist's answer, not a bookkeeper's.

getmore4less

student87 wrote: »

Thanks for your contributions, little voice.

I recently opened a a ltd company.

Where I am working, I was told I would be paid £16 k pro rata, and to provide an invoice myself from my company and work out the tax contributions etc myself.

So, I own A ltd, but am currently sub contracted to work for B ltd, if this all makes sense.

I'll admit, I have very little idea - I am very new to all this.

So you will have to pay tax, NI and employers NI, for the work you do for your company

student87

Also, it's 3 weeks employment (- 1 day which I had off) , so 14 days employment.