How are Basic Hours calculated?

Talexio
Talexio
  • Updated

Overview

Basic Hours are the number of hours worked by an employee within the payroll period. 

 

Calculation of Basic Hours

When a person is paid based on their Job Schedule hours, their basic hours follow this simple calculation:

(Job Schedule Fixed Weekly Hours * 52 Weeks) / Number of Payrolls in a year = Basic Hours per Payroll Period

For example:

An employee who works 40 Hours Fixed weekly and is paid on a Monthly Payroll (40 hours * 52 weeks) / 12 Payrolls = 173.3333 hours per Monthly Payroll

An employee who works 20 Hours Fixed weekly and is paid on a 4-Weekly Payroll (20 hours * 52 weeks) / 13 Payrolls = 80 hours per 4-Weekly Payroll

When an employee is set in their Job Schedule as a Casual/Irregular employee, their Basic Hours per Payroll Period are added manually in Payslip calculation dialog in the Basic Hours field. Any additional hours worked, for which the employee will be paid, should be added as Extra basic hours

The Basic Hours of employees who are paid according to their Approved Clockings are explained in the article here.

 

Negative Basic Hours

There may be instances where the Basic Hours in the Payslip Dialog is a negative figure. This happens when there are more Leave hours booked than Basic Hours per Payroll Period. For example:

  1. Leave taken 1st March - 31st March equates to 22 working days. If each day is 8 hours in length this would be a total of 176 hours of Leave.
  2. If an employee with this Job Schedule is paid on a Monthly basis, their Basic Hours per Payroll Period is 173.3333 hours.
  3. To keep the Total Hours paid per Payroll Period consistent with the 173.3333 hours, the system will automatically add Basic Hours in the Payslip Dialog the difference between the Leave Hours and the Basic Hours per Payslip Period as a negative figure.

Negative_Basic_Hours.jpg

In such a case and in the inverse, where the month would include less hours, such as in February, the payslip Basic Hours are automatically “topped up/down” to match the 173.3333 hours, and therefore the Basic Amount would remain constant throughout.

 

Read more on how the Basic Amount is calculated here.

Read more on how the Basic Hours for Engaged/Terminated employees is calculated here.

Share: