Calculate prorated salary for a pay raise

When you change the salary for your employee in Ludt Payroll, running a payroll will reflect this new salary. If your employee receives a raise in the middle of the pay period, you will need to manually calculate the prorated amount to accommodate the salary change.

One way to accomplish this is by finding the daily rate for the employee's original salary and the daily rate for the employee's new salary. Multiple the rates by the number of days they worked on that salary, and this total will give you the prorated amount.

1. Get the prorated amount for the 1st salary:
• Daily rate for the 1st salary: Divide the 1st salary by 260 (#of working business days in a year).
• Prorated amount: Multiply the daily rate by how many days they worked.
2. Get the prorated amount for the 2nd salary:
• Daily rate for the 2nd salary: Divide the 2nd salary by 260 (#of working business days in a year).
• Prorated amount: Multiply the daily rate by how many days they worked.
3. Add prorated amounts for the 1st and 2nd salaries together.
4. Round this number to the nearest cent.

Example

Your employee receives a raise in the middle of a biweekly pay period, earning a $100,000 salary for 5 days and $110,000 for another 5 days. To calculate how much she should earn for this pay period:

1. Get the prorated amount for the 1st salary:
• Daily rate for the 1st salary: $100,000/260 = $384.61538
• Prorated amount: $384.61538 x 5 = $1,923.0769
2. Get the prorated amount for the 2nd salary:
• Daily rate for the 2nd salary: $110,000/260 = $423.07692
• Prorated amount: $423.07692 x 5 = $2,115.3846
3. Add them together: $1,923.0769 + $2,115.3846 = $4,038.4615
4. Rounded Prorated Amount: $4,038.46