Per Hour Salary Calculation

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<b>What it is:</b> At the time of Overtime calculation you need to know how much is the per hour rate of an employee. It is difficult to calculate for each month as no of days are different of each month. So we will calculate total no of hours in a year and then we will calculate the per hours rate. Once you will have per hour rate then you can simple multiply with no of hours worked as overtime. Now it depends on organization?s policy like few pay double overtime and few single. Simply you need to change the factor in the formula which will be explained here.

<b>Why it is: </b>To calculate overtime.
<b>
Who will set this:</b> If in Oracle then HRMS and Payroll administrator/Consultant and if manual in excel then one who is responsible to calculate overtime.

<b>When it is set: </b>During Initial Implementation stage it is set.

<b>Where it is set:</b> In Human Resources module using Fast Formula.

How it is useful with Examples: It is very important to under the concept of calculating no of working hours in a year and then it will be easy to get overtime of an employee. Now we will try to understand the above using a simple example.

Monthly Salary = 1000
Overtime Hours = 1
Hourly Rate = ?
Working hours in a year = Weeks in a year * Working Days in a week * Daily working hours
= 52 * 5 * 8
= 2080
Overtime Factor = 1
Hourly Rate = (Overtime Hours * Monthly Salary * Factor * 12 ) / Working
hours in a year
= ( 1 * 1000 * 1 * 12) / 2080
= 5.769231

Now you can make changes as per your organization requirements.