To build this calculator we assume that there are 52 weeks and 260 weekdays per year. The unadjusted results do not include holidays and vacation days.
Before talking about the formula, lets see what is salary?
A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis.
Now, lets see how Unadjusted and Adjusted salaries are calculated?
Suppose that your hourly salary rate is $35. you work 8 hours each day and 5 days per week. So, you have 260 working days in a year(52 weeks multiplied by 5 working days a week). Now, you can calculate your unadjusted salary as:
$35 × 8 × (260) = $72,800
As observed, the hourly rate is multiplied by the number of working days in a year and then by the number of hours in a working day. Now we can move to the calculation of adjusted salary.
$35 × 8 × (260 - 25) = $65,800
In the above calculation, 25 is subtracted from 260, because we assume that you have 10 holidays and 15 paid vacation days a year.
These yearly computations are used to calculate all bi-weekly, semi-monthly, monthly, and quarterly values.
Different Pay Frequencies Explanation
- Daily - Pays on a daily basis, generally towards the end of each day. Some short-term workers are compensated in this manner.
- Weekly - It is paid once a week, generally on Fridays. It is more expensive for businesses with 52 weeks each year, resulting in greater payroll processing costs, that is why it is less popular than bi-weekly or semi-monthly.
- Bi-Weekly - Pays each two weeks, for a total of 26 times each year in most years.
- Semi-Monthly - Payment is made twice a month, generally on the 15th and final day of the month. Although this is normal, it leads to irregular pay dates owing to month-to-month variations in dates.
- Monthly - Payment is made once a month. Employers usually choose this choice since it is the least expensive.