Last pay calculation

imoustache

Hi guys,
I was on £47,847 a year and I’ve left my job. I’m pretty sure they calculated it all wrong.

My last official day was 20/03/2022.

They paid me:

— Monthly pay = £2,427.02

— 6.5 days @ £173.3587 ( 'payment in lieu') = £1,126.83

However, if I do (£47,847 / 52) / 5 = £184.02 x 6.5 = £1,196.17, this should be correct holiday pay right?

What about monthly pay for the 20 days, please? I believe it should be slightly more? Shouldn’t it be £184.02 x 14 working days = £2,576.28?

Any insight will be highly appreciated.

Thanks

Savvy_Sue

Our payroll software divides the final month by the number of days in the month, then multiplies that daily rate by no. of days worked or not worked. Is that what your company has done?

imoustache

Possibly, but they got the wrong daily rate, didn’t they? How did they get to £173,35? It just doesn’t make sense.

Jaybee_16

Doing some quick calculations, I agree with the OP.

47847/260 working days pa = 184.02 per day x 14 days worked in March = 2576.37
184.02 x 6.5 = 1196.13

All assuming you worked a 5 day week.

adolphin10

They will have done 47846/12/23 working days in March = £173.36. A method many companies use

Personally I prefer the 260 method as it means the daily pay is the same for all months but their way is also permitted and you are just unlucky to have left in a month with the highest number of working days

theoretica

They have used a common calculation - and while I agree it can give uneven results - in either direction - my understanding is it is allowed so long as it doesn't take you below minimum wage, which it clearly doesn't here.

Anyone who has a monthly pay packet won't be getting equal pay for every day as you get paid the same for February as longer months, and regardless of if there are 4 or 5 Sundays in the month.

imoustache

adolphin10 said:

They will have done 47846/12/23 working days in March = £173.36. A method many companies use

Personally I prefer the 260 method as it means the daily pay is the same for all months but their way is also permitted and you are just unlucky to have left in a month with the highest number of working days

Thanks for your message.

I find it unfair. Especially that my holiday (6.5 days) were accrued from January. So how are they allowed to pay an average of March daily rate for holidays that aren’t solely from March?

They’ve done a calculation that only benefits them.

Undervalued

imoustache said:

adolphin10 said:

They will have done 47846/12/23 working days in March = £173.36. A method many companies use

Personally I prefer the 260 method as it means the daily pay is the same for all months but their way is also permitted and you are just unlucky to have left in a month with the highest number of working days

Thanks for your message.

I find it unfair. Especially that my holiday (6.5 days) were accrued from January. So how are they allowed to pay an average of March daily rate for holidays that aren’t solely from March?

They’ve done a calculation that only benefits them.

You would of course have been happy if they had chosen a method that only benefited you!

Seriously though, I am not an expert on payroll but as far as I know the method "adolphin10" has described is very common and quite easy to justify.

Unless you have evidence that they deliberately choose the least favourable method for the month in question I am not sure you have a valid complaint.

Savvy_Sue

Agree with Undervalued: as long as they apply this method consistently, to everyone, it's not unfair, it's the way they do it (and the way we do it too).