08 Jul 2019
You’ve undoubtedly heard the term ‘pro rata’. But do you know exactly what it means and how to work out pro-rata pay for your employees?
In this article, we’ll be taking a look at the calculations you need to make, as well as other areas you need to consider when employing someone pro rata.
Remember, too, that you can use our pay and benefits services at any time for assistance on this matter.
What is it?
Let’s start with a definition.
In its most basic form, a pro rata salary is an amount of pay you quote an employee based on what they would earn if they worked full-time.
For example, if an employee’s salary would be £20,000 pro rata in a 40-hour week, but they only work 30 hours a week, their annual salary would be £15,000.
So, someone who works ‘pro rata’ is getting a proportion of a full-time salary.
How to work out pro rata salary
The basic calculation you can use to work out pro rata is as follows:
- Annual salary / full-time hours x actual work hours.
This isn’t always 100% accurate. The better way to calculate pro rata pay entitlement is to work it out by hours rather than days.
In other words, it’s more helpful to think about it as a wage, rather than a salary.
How to work out pro rata wage
If an employee would receive £25,000 for a 40-hour week, then you can easily work out the hourly rate, which is £25,000 / 40 = £625.
Once you’ve figured out the hourly rate, you should be able to reach the pro rata wage just by multiplying the hourly rate by the number of hours the employee will work. For example:
- 15 hours x £625 = £9,375.
If you’re still struggling with how to work out pro-rata pay, remember the basic equation: Annual salary / full-time hours x actual work hours.
How to work out pro rata holiday
A part-time employee still has holiday entitlement, so let’s work that out too.
There’s a quick and simple trick for working out an employee’s pro rata holiday. Multiply the number of days they work each week by 5.6.
If a pro rata employee works 3 days a week, then their holiday entitlement is 3 x 5.6, or 16.8 days.
Obviously, giving staff 0.8 of a holiday is awkward, for timekeeping purposes and the employee. It’s usually worth rounding this up to the nearest whole number, 17 in this case.
Why the 5.6 multiplier?
Well, the basic statutory holiday entitlement of a full-time employee is 28 days. This means they work five days a week. Five, multiplied by 5.6, gives us the full 28 days’ entitlement.
Working on a pro rata basis
Another important element to consider when employing someone on a pro-rata basis is benefits.
The Part-Time Workers Regulations state that part-timers should receive the same benefits as those working full-time.
What this means is that if you offer a pension to full-time employees, then you must also offer this to those working pro rata.
The list doesn’t stop at pay-related benefits either. If full-time employees get a gym membership or their birthday off as annual leave, those on part-time should too.
Pro rata salary calculator
Hopefully, we’ve answered all of your questions and you now know how to work out pro rata salary for UK-based employees. Just a reminder if not…
Annual salary of full-time employee/total hours in a working week = hourly rate
Hourly rate x hours of pro rata worker = pro rata salary
If you’d like to skip the hassle of working that out yourself however, there are options available to you.
You can find a pro rata calculator online. There’s a particularly good one at the salary calculator.
If you’re looking for a pro rata holiday calculator online, you can calculate holiday entitlement on gov.uk, or you can leave the working out to a Croner expert.
Need help calculating pro-rata pay or holidays?
Speak to a Croner expert today and get advice on pro-rata employment contracts, working hours, pay & benefits and much more. We can even do the work for you!
Call today on 0808 145 3380.
Do you have any questions?
Get a free callback from one of our regional experts today