Calculating Hourly or Daily Rate For Salaried Employees by: Best Business Payroll
Breaking down an employee's salary into a daily or hourly rate is achieved in the following manner:
Divide the annual salary by 52 weeks for weekly pay; divide the weekly pay by 40 hours for hourly pay.
For example, say your employee makes $20,000 per year. The weekly rate would be $384.62 ($20,000 divided by 52), and the hourly rate would be $9.62 (384.62 divided by 40). In this way, you can accurately calculate what is owed to the employee should he leave in the middle of a pay period.
Be sure to keep a written record, either in an Excel spreadsheet or other format, in case the Department of Labor audits your company. Providing this documentation should satisfy them that your employee was paid appropriately.
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