How to Calculate Vacation Pay for Someone Who Is Salary?

Payroll software usually handles calculating vacation pay for salaried employees, but some software still requires entering an hourly vacation rate. Because some companies still prepare payroll manually, knowing how to manually calculate vacation pay for salaried employees is a necessity. Though it may initially seem difficult, in a few simple steps you can make this calculation.

Things You'll Need

• An adding machine or calculator

Instructions

1. Multiply the number of hours the employee works per week times 52, the number of weeks in a year, to get the total number of hours the salaried employee works in a year. For a regular 40-hour workweek, the number of work hours in a year is 2,080.

2. Convert the employee's salary rate to an hourly rate by dividing the employee's annual salary by the number of annual hours worked that you calculated in Step 1.

3. Divide the total hours worked per week by the number of days the employee works per week to calculate the scheduled number of working hours per day. For a 40-hour, five-day workweek, you'd have eight working hours per day.

4. Multiply the number of vacation days taken by the scheduled number of working hours per day (Step 3) to get the number of vacation hours taken.

5. Multiply the hourly rate you calculated in Step 2 by the number of vacation hours taken that you calculated in Step 4. This is the total amount of vacation pay for the salaried employee.

References

• Intuit