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