Pro rata issue - 4 month contract

Hi All,

I was given a 4 month contract which started on 4 Sep 2023. I am on their books and being paid PAYE.

I have just received my payslip and they have pro rated this as I didn't work on 1 Sep 2023 (agree they should pro rata it)

Their calculation is

ANN SALARY/260 * 20 = Sep gross salary

260 = working days in a year
20 = days worked in Sep

All the advice I have read is this should be calculated on

Annual salary / full-time hours x actual work hours

This gives a larger gross salary for this month

Also in my contract I am not expected to work for 260 days as this is only a 4 month contract so calculating this on a yearly basis seems to me unfair/an attempt to pull the wool over my eyes

Can anyone advise on this please

Thanks
Phil

Comments

  • Andy_L
    Andy_L Forumite Posts: 12,676
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    Mathematically it makes no difference if they use hours or days. You just multiply the number of days by the working hours in the day &, since you're doing it to both sides of the equation, it cancels out


  • Lucky_Phil_2
    Lucky_Phil_2 Forumite Posts: 44
    Part of the Furniture 10 Posts Combo Breaker
    Forumite
    Not my point, they are using an annual basis to pro rata a 4 month contract. X is annual salary. 

    Their calculation (52 week basis)

    (X/260) * 20

    My calculation (solely this month basis)

    20*X/(21*12)

    Substitute any number for X and you will see that the latter is a greater figure
  • Undervalued
    Undervalued Forumite Posts: 8,648
    Part of the Furniture 1,000 Posts Name Dropper
    Forumite
    edited 28 September at 1:22PM
    Not my point, they are using an annual basis to pro rata a 4 month contract. X is annual salary. 

    Their calculation (52 week basis)

    (X/260) * 20

    My calculation (solely this month basis)

    20*X/(21*12)

    Substitute any number for X and you will see that the latter is a greater figure
    The number of actual working days in a month can vary considerably depending on when the weekends fall and the number of calendar days in the month. For a full time permanent employee that doesn't matter too much as they average out over the year. However when somebody is only employed for four months they could gain or lose a few days if the annual number of working days is just divided by 12 then multiplied by 4.

    Not counting holidays, are you expected to work from Monday to Friday for every week you are there or are you going to work exactly 20 days each month? Which may not be the same thing!
  • Andy_L
    Andy_L Forumite Posts: 12,676
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    There's 2 different pro-rotas at once here

    There's who much of the annual salary you should get for a 4 month contract. 

    and then how much you should get paid for only working 20/21 days in one month (inferring there were 21 working days in sept)


    20*X/(21*12) 

    Is 21 working days in a month & 12 is months in a year so that's 252 working days in the year? 
    Not every month will have 21 working days


  • JGB1955
    JGB1955 Forumite Posts: 3,353
    1,000 Posts Fourth Anniversary Name Dropper
    Forumite
    Not my point, they are using an annual basis to pro rata a 4 month contract. X is annual salary. 

    Their calculation (52 week basis)

    (X/260) * 20

    My calculation (solely this month basis)

    20*X/(21*12)

    Substitute any number for X and you will see that the latter is a greater figure
    Your calculation seems to be based on 252 working days a year, rather than 261 (or 262 in a leap year).  Your calculation is therefore inevitably going to come up with a greater figure.  
    #2 Saving for Christmas 2023 - £1 a day challenge DONE and DUSTED! £1460£1460
Meet your Ambassadors

Categories

  • All Categories
  • 340.2K Banking & Borrowing
  • 249.1K Reduce Debt & Boost Income
  • 448.3K Spending & Discounts
  • 232K Work, Benefits & Business
  • 603.2K Mortgages, Homes & Bills
  • 171.6K Life & Family
  • 245.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards