According to TheSite.org, pro rata pay is a Latin term meaning: "Portion of" or "Proportionally." Pro rata pay is often used as a pay scale for part-time employees doing the same job as their full-time colleagues. When an employer establishes a pro rata pay scale, the part-time employee will still maintain all the full-time benefits, such as holidays and parental leave, but will be paid pro rated according to the hours worked.
Take the full-time annual salary, and divide by 52. Once you have established where the pro rated employee will be placed on the pay scale, you will have a full-time annual salary to pro rate from.
Example: £29,250 (annual full time salary) / 52 (weeks annually) = £562.40 (salary per week)
Divide answer in Step 1 by the full-time number of hours per week. This answer is the hourly rate. Example: £562.40 / 40 (full-time hours per week) = £14.0 (hourly rate)
Multiply the hourly rate by the number of hours the pro rated employee will be working per week. This is the weekly salary for the pro rated employee.
Example: £14.0 (hourly rate) x 20 (weekly hours) = £281.10 (pro rata weekly pay)
Multiply the pro rata weekly pay by the number of weeks per year the pro rated employee will work.
Example: £281.10 (weekly pro rata pay) x 50 (weeks working per year) = £14,059.5 (annual salary)
Divide the pro rata annual salary by 12 to get the monthly salary.
Example: £14,059.5 (annual salary) / 12 = £1,171.60 (monthly salary)
When calculating pro rata salary, keep in mind holiday pay and benefits are figured separately.
Tips and warnings
- When calculating pro rata salary, keep in mind holiday pay and benefits are figured separately.