Calculations of Basic Hours for Engaged/Terminated Employees

Daniel Galea St John
Daniel Galea St John
  • Updated

Overview

If an employee resigns (or leaves the company), you will need to terminate their Talexio profile. For detailed information on how this is done, check out this article. After terminating an employee, that employee will still need to be added to one final payroll and paid of for the hours worked in their final days/weeks with the company. Talexio works out these prorata automatically. But how are they actually calculated? There are two methods:

  1. Average hours
  2. Actual hours

Permissions

You need to ensure that you have the Terminate Employee permission to terminate an employee. You will also need the Manage Payroll permission to add the employee to payroll. You will need the Manage client settings permission to set the actual hours setting.

 

How are the basic hours calculated?

First off, you will need to add the terminated/engaged employee to payroll. Follow the steps here to do so. 

Once the employee(s) has been added to payroll, click on the employee's name to open the payslip:

  1. The payslip date will show the payroll start date up until the employee's end date (assuming the end date is within the same month. Using the above example, the employee was terminated on the 15th of January, so the employee is included in the January payroll and the dates for this payroll are 1st January-15th January). If an employee was engaged on the 15th of January, the dates of the payslip would show 15th January - 31st January.  
  2. Basic hours and basic amount: these are calculated using one of the below two options. Read on for detailed information.
  3. SSC Mondays: this will automatically change according to the number of Mondays which the employee is to work in his/her first/final month. Check out this article for the cases where an employee might pay more contributions. 
  4. Government bonuses: automatically, the employee will be paid prorata for the remaining government bonuses which fall under their position's duration. For more information on this, click here. This applies to terminated employees. 
  5. Leave pay-offs: similarly, these are calculated prorata once the employee's end date is inputted. This also only applies to terminated employees. Click here for more information

Actual hours worked (default calculation) 

By default, the basic hours of an engaged/terminated employee are determined based on the hours actually worked:

  • Employees who are paid on the basis of approved clockings will be paid on those clockings. For example: an employee was terminated on the 2nd of June. This employee clocked 5 hours on the 1st and 9 hours on the 2nd. The employee's basic hours will be 14 hours. 
  • Employees who are paid based on their job schedule hours will be paid on their daily working hours. For example, a full time employee who works 40 hours per week over 5 days was terminated on June 2nd. This employee's basic hours for the June payroll will be 16 hours (40/5 = 8 hours per day). In this case, there is a capping of 173.3333 hours. 

Actual hours worked so far minus hours paid so far

There is another option. To switch on this setting, you will need to go to Settings -> Payroll and switch on the toggle Use alternate calculation method for termination hours: 

So how are the hours calculated with this method?

The formula is:

Actual hours worked so far - hours paid so far

173.3333*5 = hours paid till end May (in the case of a full time 40 hours per week employee. For a Part time 20 hour employee, this would be 86.6667*5). 

Therefore: 173.3333*5 = 866.6665 hours worked in previous payrolls.

Actual hours worked so far, including this payslip (actual hours worked each month): 944 hours

Total hours worked minus hours paid till end of May = Number of hours to be paid in June (last payroll in which the employee is paid).

Remaining hours: 944 - 866.665 = 77.3335 hours 

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Previously, there was an option to calculate basic hours for engaged/terminated employees based on the below formula: 

Total hours worked by a Full time employee/Number of months in a year = Result/working days in termination month *days worked in the employee's last payroll period.

This option was removed in June 2023 in favour of the above two methods.

How are the basic hours calculated for employees joining mid-month?

If an employee has joined in the middle of the month (or on any day other than the payroll start date, that employee will be paid on the actual hours worked:

  • Employees who are paid on the basis of approved clockings will be paid on those clockings. For example: an employee was employed on the 12th of June. This employee's clockings are as follows:
    Date Clocked Hours
    Thursday 1st June 5 hours

    Friday 2nd June

    3 hours
    Monday 5th June 6 hours
    Tuesday 6th June 0 hours
    Thursday 8th June 7 hours
    Friday 9th June 0 hours
    Monday 12th June 7 hours

    The employee's basic hours will be 28 hours. 

  • Employees who are paid based on their job schedule hours will be paid on their daily working hours. Using the below example, Norman, a full time employee who works 40 hours per week over 5 days was engaged on the 15th of September. This employee's basic hours for the September payroll will be 88 hours (40/5 = 8 hours per day x 11 working days). In this case, there is a capping of 173.3333 hours. 



    Working days Hours worked
    Friday 15th September 8 hours

    Monday 18th September

    8 hours
    Tuesday 19th September 8 hours
    Wednesday 20th September 8 hours
    Thursday 21st September * 8 hours
    Friday 22nd September 8 hours
    Monday 25th September 8 hours
    Tuesday 26th September 8 hours
    Wednesday 27th September 8 hours
    Thursday 28th September 8 hours
    Friday 29th September 8 hours

    *Employee doesn't work on public holidays but is paid for them.

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