How are Basic Hours calculated?

Calculation of Basic Hours

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

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.

Different Scenarios

Not all employees work a full payroll period. The different cases and their calculations are listed and explained below:

• A common instance is where you have employees who leave the company before the end of a payroll period. Talexio works out the hours of such employees automatically on prorata basis. There are two methods for this:

  1. Average hours
  2. Actual hours

  For terminated employees' final payslip, it is worth noting the below: 

  

  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 

  

• 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. An employee has 28 clocked hours. And these are all approved as basic 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. 
    
    

• 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.

  

  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.

• In cases where employees change their job schedule in the middle of a payroll, you will not be able to change the system's calculated hours through the payslip. Instead, any changes must be done by going to Edit -> Bulk Edit and changing the hours from there if needed:
  
  
  

Each of the above instances is explained in the Payroll module. The hours worked breakdown for employees having multiple positions in the same payroll period is also displayed on the payslip, and can be viewed by the payroll admin during the processing of payroll: