How to Calculate Vacation for a Salaried Employee

Federal law doesn't require vacation pay.

Vacation pay is a matter between the employer and the employee, according to the United States Department of Labor. Therefore, the employer doesn't have to give employees vacation time if it doesn't want to. When vacation time is given, the amount of paid time allotted to employees varies by employer. Typically, salaried employees receive a certain amount of vacation time based on years of service. You can use a standard calculation to figure vacation pay due to a salaried employee.

Instructions

1. Determine the number of pay periods in the year. For example, if the pay period is weekly, there are 52 pay periods in the year; if it's biweekly, there are 26 annual pay periods; if it's semi-monthly, there are 24 annual pay periods; and if it's monthly, there are 12 annual pay periods.

2. Figure the number of work hours in the year. There are typically 2,080 work hours (52 weeks x 40 regular hours) in the calendar year. This includes vacation and holidays, for which salaried employees are usually paid.

3. Calculate daily rate or hourly pay.

   Hourly example: $54,000 (annual salary) / 52 weekly pay periods / 5 days / 8 hours = $25.96.

   Daily example: $62,000 (annual salary) / 26 biweekly pay periods / 10 days = $238.46.

4. Calculate vacation pay. Multiply the number of vacation hours by the hourly rate or multiply the number of vacation days by the daily rate to arrive at the vacation pay.

References

• U.S. Department of Labor: Vacation Pay
• U.S. Department of Labor: Salary Basis

Resources

• Read this Article in Spanish