## Prorate an employee's salary

If your employee receives a raise in the middle of a pay period, you must manually calculate the extra amount to add to the payroll to accommodate the salary increase.

Please consult a CPA with any questions about the method outlined below - several methods may be acceptable depending on your specific situation.

In the example calculation below, Aly is making $50,000 a year when she gets a raise to $55,000 a year. She is paid every other week on Friday. Her raise is effective in the middle of the pay period, on a non-payday Friday.

Divide their annual salary by the number of pay periods in a year. |
Aly makes $50,000 a year and is paid every other week. |
$50,000/26 = $1,923.08 |

Divide the amount they are paid in a period by the number of days in a period to calculate their old daily rate. |
Aly makes $1923.08 for 14 days worked. |
$1,923.08/14 = $137.36 |

Repeat the steps above to find your employee’s new daily rate. |
Aly now makes $55,000 a year. Her new daily rate is $151.10. |
$55,000/26 = $2,115.38. $2115.38/14 = $151.10 |

Add the number of days at the old rate with the number of days at the new rate to get the total salary for the pay period. |
Aly worked 7 days at $137.36 a day. She worked 7 days at $151.10 a day. |
$137.36 x 7 = $961.52 $151.10 x 7 = $1,057.70 $961.52 + $1,057.70 = $2,019.22 |