Give a salaried employee a raise during a pay period

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

  1. Figure out their old daily rate. Divide their old salary by 260 (the number of working business days in a year).
  2. Multiply their old daily rate by the number of days in the pay period they worked at this rate.
  3. Figure out their new daily rate. Divide their new salary by 260.
  4. Multiply their new daily rate by the number of days they worked at this rate.
  5. Add together both rates to get their correct salary.
  6. When you process payroll add in the difference between their old salary and their correct salary to account for the raise.

Example

My employee Aly makes $50,000 a year. She is going to get paid on October 15 for the period of October 1-15. She gets a big promotion and gets a raise to $60,000 a year effective October 10.

First, I divide 50,000 by 260 to get her old daily rate of $192.31. Multiplied by the 9 days in the period she worked at this rate, I get $1730.79.

Second, I divide 60,000 by 260 to her new daily rate of $230.77. Multiplied by the 6 days in the period she worked at this rate, I get $1384.62.

I add the two rates together to get her total salary, $3115.41.
When I process payroll I see that her old total salary is $2884.65, so I calculate the difference between her old and new total salary, which is $230.76. I enter $230.76 as Other Earnings.

 

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