Conversion of Compensation Rates to Different Frequencies
The system converts compensation rates to daily, monthly, and other frequencies using standard formulas. The formula for converting to or from an hourly rate takes the standard hours and standard work period into account.
The system performs compensation rate conversions as follows:
-
Finds or calculates the annual rate for compensation.
-
Divides the annual rate using de-annualization conversion calculations to calculate the rate at the desired frequency.
-
Multiplies the converted compensation rate by the FTE factor if Apply FTE is selected for the pay component.
Note:
(FRA) For workers in French regulatory regions, the system uses the PAID_FTE field to multiply the converted compensation rate.
Annualized Rate Calculations
The system uses the following formulas to convert compensation rates to an annual frequency:
| Original Frequency | Formula for Conversion to Annual Frequency |
|---|---|
|
Hourly |
Annual Rate = Comprate × Job Standard Hours × Frequency Annualization Factor of Standard Work Period |
|
Monthly, daily, and other |
Annual Rate = Comprate × Frequency Annualization Factor |
De-Annualized Rate Calculations
The system uses the following formulas to convert compensation rates from an annual frequency to another frequency:
| Non-Annual Frequency | Formula for Conversion from Annual Frequency |
|---|---|
|
Hourly |
Hourly Rate = Comprate / (Job Standard Hours × Frequency Annualization Factor of Standard Work Period) |
|
Monthly, daily, and other |
Non-Annual Rate = Annual Comprate / Frequency Annualization Factor |
The following examples illustrate the use of these formulas.
Example of Hourly to Monthly Compensation Rate Conversion
Teresa Johnson has the following job data information:
| Employment Variables | Values |
|---|---|
|
Comprate (hourly) |
10 |
|
Job Standard Hours |
35 |
|
Frequency Annualization Factor of Standard Work Period |
52 |
|
Frequency Annualization Factor of Month |
12 |
The following table shows how the system calculates Teresa Johnson's monthly FTE (full-time equivalency) compensation rate. The total represents Teresa's monthly salary based on a thirty-five hour workweek over a fifty-two week year.
| Rate | Equation |
|---|---|
|
Annual |
10 × 35 × 52 = 18,200 |
|
Monthly |
Annualized Comprate / Frequency Annualization Factor of Month 18,200 / 12 = 1516.67 |
Example of Monthly to Biweekly Compensation Rate Conversion
Bill McKenny has the following job data information:
| Employment Variables | Value |
|---|---|
|
Comprate (monthly) |
2000 |
|
Frequency Annualization Factor of Monthly |
12 |
|
Frequency Annualization Factor of Biweekly |
26 |
|
Apply FTE Selected |
Yes |
|
FTE Factor |
0.95 |
The following table shows how the system calculates Bill McKenny's biweekly compensation rate:
| Rate | Equation |
|---|---|
|
Annual |
Comprate × Frequency Annualization Factor of Month 2000 × 12 = 24,000 |
|
De-annualize |
Annualized Comprate / Frequency Annualization Factor of Biweekly 24,000 / 26 = 923.08 |
|
Multiply by FTE |
923.08 × 0.95 = 876.85 |