Examples of Pay Rate Calculations
This topic provides examples of how the system uses compensation rates and frequencies and pay period frequency to calculate pay rates.
Example: Biweekly Pay Period Calculation of Monthly Compensation
This example illustrates how Payroll for North America calculates the pay period rate by annualizing monthly compensation using the following frequencies:
| Description | Frequency ID | Frequency Type | Frequency Annualization Factor |
|---|---|---|---|
|
Pay frequency (Pay Group table) |
B1 |
B (biweekly) |
26.1 |
|
Compensation frequency (employee's Job data setup) |
M |
M (monthly) |
12 |
Using a compensation rate of 1,000 USD, the calculations of the annual compensation rate and pay period compensation rate are:
-
Annual Rate = Comprate × Compensation Frequency Factor
12,000.00 = 1,000.00 × 12
-
Pay Period (Biweekly) Rate = (Annual Rate) / Pay Frequency Factor
459.77 = 12,000.00 / 26.1
Example: Weekly Pay Period Calculation of Hourly Compensation
Payroll for North America uses the annualization factor of the standard work period frequency in combination with the standard hours to calculate pay rates or proration of hourly compensation.
This example illustrates how Payroll for North America calculates the weekly pay period rate of hourly compensation.
The pay group's pay period frequency definition is:
| Description | Frequency ID | Frequency Type | Frequency Annualization Factor |
|---|---|---|---|
|
Pay frequency (Pay Group table) |
W (weekly) |
W (weekly) |
52 |
The employee's compensation frequency definition is:
| Comp Rate | Comp Frequency | Standard Hours | Annualization Factor of Std Work Period |
|---|---|---|---|
|
10.00 |
H (hourly) |
40.00 |
52 |
The calculations of the annual compensation rate and pay period compensation rate are:
-
Annual Rate = Comprate × (Standard Hours × Standard Work Period Annualization Factor)
20,800.00 = 10 x 40 × 52
-
Pay Period (weekly) Rate = Annual Rate / Pay Frequency Factor
400 = 20,800.00 / 52