Calculate prorated pay for a dismissed employee

When you dismiss an employee, Gusto automatically prorates the last payment if this is processed through the employee's last payroll or through a termination payroll. If you did not pay a dismissed employee through one of these methods, you can manually calculate the prorated amount and process this through an off-cycle payroll.

One way to accomplish this is by finding the daily rate for the employee's salary. Multiply this rate by the number of days they worked, and this will give you the prorated amount.

  1. Get the daily rate: Divide the salary by 260 (#of working business days in a year).
  2. Prorated amount: Multiply the daily rate by how many days they worked.
  3. Round this number to the nearest cent.

Example

Your employee who earned a $100,000 salary was dismissed after 3 days into a pay period. To calculate how much he should be paid:

  1. Get the daily rate: $100,000/260 = $384.61538
  2. Prorated amount: $384.61538 x 3 = $1,153.8461
  3. Rounded Prorated Amount: $1,153.85

 

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