How to calculate a change in contract.

To calculate monthly pay in a month where an employees contract has changed, we would;

Step 1: Make sure you have all the details of what employees are contracted to (pay scale points, hours, weeks paid for supporting staff, any additional allowances) and when these conditions are going to take effect i.e. what date the change occurs.

Step 2: For each set of contract conditions, calculate the full monthly salary as if the employee was on that contract for the full month with no change. 

             i.e. Yearly salary £40,000 / 12 = Full monthly salary of £3,333.33

Step 3: Divide each monthly salary by the calendar days (i.e. total days) in the month to get a daily rate for each set of conditions. 

£3,333.33 / 31 = £107.53 (Based on 1FTE)

Step 4: Multiply each of the daily rates in turn by the number of days the employee is on that contract. 

e.g. 20 hours from 1st-15th  (0.5FTE) = £107.53 X 0.5 FTE X 15 DAYS = £806.45

       25 hours from 16th-31st (0.7 FTE) = £107.53 x 0.7FTE x 16 DAYS = £1204.30

Step 5: Add up all the partial values calculated to get a monthly total.

£806.45 + £1204.30 = £2,010.75 Total salary.