Understanding partial pay
Partial pay is payment for less than a full pay period. This commonly occurs when employees start or leave mid-period, take unpaid leave, or work reduced hours. Calculating partial pay correctly ensures employees receive what they're owed while maintaining payroll accuracy.
When partial pay applies
- New starter mid-period
- Employment ends mid-period
- Unpaid leave taken
- Reduced hours worked
Key considerations
- Correct calculation method
- Allowance treatment
- Leave accrual impact
- Superannuation
When partial pay applies
- New employees: Starting after the pay period begins
- Terminations: Leaving before the pay period ends
- Unpaid leave: Leave without pay reduces earnings
- Reduced hours: Temporary reduction in working hours
- Public holidays: Salaried employees may have adjustments
- Suspensions: Unpaid suspension periods
Calculation methods
Common calculation approaches
Daily rate method
Annual salary ÷ 52 weeks ÷ 5 days = Daily rate
Multiply by days worked in period
Hourly rate method
Annual salary ÷ 52 weeks ÷ weekly hours = Hourly rate
Multiply by hours worked in period
Calendar day method
Period salary ÷ calendar days in period × days employed
Used in some awards/agreements
Check your award
Different awards specify different calculation methods. Some use working days, others calendar days. Using the wrong method can result in over or under payment. Always follow the method in your applicable award or agreement.
Best practices
Calculation
- Use the correct method for your award
- Document the calculation
- Include all applicable allowances
- Calculate super correctly
Administration
- Process on time
- Communicate with employee
- Show breakdown on payslip
- Keep calculation records
Common mistakes
Wrong calculation method
Using working days when the award specifies calendar days, or vice versa. This can significantly affect the amount paid, especially for employees with unpaid leave.
Forgetting allowances
Not including applicable allowances in partial pay calculations. Some allowances should be prorated; others paid in full. Follow award requirements.
Inconsistent treatment
Calculating partial pay differently for different employees in similar situations. Use a consistent method based on award requirements to ensure fairness and compliance.
Key takeaways
Partial pay occurs when employees work less than a full pay period. Use the calculation method specified in your award, include applicable allowances, calculate superannuation correctly, and document calculations. Consistency and accuracy are essential.
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