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Advice on change to Daily Rate

Hi

I currently work abroad and our company is changing our current salary arrangement which is an annual salary paid monthly, they are changing us to a day rate, which means we only get paid when we are working, this is not a problem, but i have concerns of how it has been worked out.

I believe the second equation is correct, but would like your thoughts if possible

I have put below 2 equations of how it has been worked out
Equation 1 - by the company
Equation 2 - by 2 professional finance persons i know

I have not put my actual salary amount in the equations below, you can put any amount into the equations, as i do not wish to disclose my salary

Equation 1
This is how the company has worked it out

New salary calculations based on our annual salary

Scheduled Rotation 9 weeks on : 3 weeks off

9 weeks + 2 x travel days = 65 days x 4 = 260
21 days leave x 4 = 84
21 additional working days in the year = 21
Total =365 days

Current salary: $xxxxx x 12 months = $xxxxxx per annum

65 days x 4 times per year + 21 additional days = 281

$xxxxx (annual salary) divided by 281 = $xxxx per day


Equation 2
The new pay is based on my annual salary (365 days) $XXXXXX this is what I would get per year regardless of how many days I worked in that year, we are on 9 and 3 rotations plus paid travel days in that year which is 86 days per rotation

63 days on travel days (9 weeks) = 63 days
21 days time off + 2 days travel (3 weeks) = 21 days
total rotation = 86 days

The 365 days is then divided by 86 days which equals 4.244 rotations per year

Rotation(time off) and travel 21 + 2 = 23 times by 4.244 equals 97.61 rotation days in that 365 day period

365 days – 97.61 rotation days in that year = 267.388 working days per year

Annual salary $xxxxx divided by the 267.388 working days in that year equals a daily rate of $xxxxx

Comments

  • molerat
    molerat Posts: 33,544 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I would agree the company calculation is wrong. They have simply taken the leftover 21 days per year as working days.

    I worked it out as
    1 rotation is 63+2+21=86
    365/86=4.244 rotations per year
    63 working days per rotation
    63x4.244=267.372.
  • theoretica
    theoretica Posts: 12,685 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Another way of getting the same result is one rotation is 86 days, of this 63 days are working days. So 63/86 days are working ones.

    63/86 x 365 = 267 - to get the bits after the decimal point you would need to average in leap years.
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
  • adysam
    adysam Posts: 5 Forumite
    Thanks for the advice, I am still waiting on the company's decision on this
  • Valli
    Valli Posts: 25,286 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Chances are they are doing this to reduce their wages bill, hence the calculation they have come up with.
    What does your Union have to say about this?
    Don't put it DOWN; put it AWAY
    "I would like more sisters, that the taking out of one, might not leave such stillness" Emily Dickinson
    :heart:Janice 1964-2016:heart:

    Thank you Honey Bear
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    edited 18 July 2016 am31 9:15AM
    They are both wrong.

    a full rotation is 9*7 + 2 + 3*7 = 86days. 65 of them paid

    The 365 days is then divided by 86 days which equals 4.244 rotations per year

    4.244 * 65 = 275.86 paid days a year(this includes rolled up holiday pay)

    if they want to drop travel days as paid then 267.372
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