How to Calculate a Prorated Vacation

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Calculating a prorated vacation is fairly simple.
Calculating a prorated vacation is fairly simple. (Image: Calculator image by Alhazm Salemi from Fotolia.com)

You can calculate an employee-specific prorated vacation from a set, universal annual vacation allowance. That method applies to first year of employment, final year employment and all years between.

Multiply annual vacation in weeks by the number of days worked per week by the number of hours worked per day. An equation example is:

5 weeks per year x 5 days per week x 9 hours per day = 225 hours per year.

Divide that value by 52. That will give you the number of hours of vacation per week, or the hours per week value. The equation for this example is:

225 / 52 = 4.3269, which rounds to 4.33 hours per week.

Calculate the number of weeks worked in the year up to the pay cutoff date.

If an employee started Sept. 6, 2010, and the pay cutoff date is Dec. 31, 2010, then the total equals 16 weeks and four days. Four days is 4/5, or 0.8, of the five-day work week. So the total number of weeks is 16 + 0.8 = 16.8.

Multiply that value by the "hours per week value" you figured previously. The equation for this example is:

16.8 x 4.33 = 72.7, when rounding this answer.

Revise that answer to the nearest quarter hour. For this example, 72.7 becomes 72.75 hours. That is equal to one working week, three days and 3/4 hours.

Tips & Warnings

  • If prorated vacation is calculated annually from the start of employment rather than using a universal cutoff date, only Steps 1 and 5 are required.
  • Vacation above or below an employee's allocation can be passed onto the next year by altering the annual vacation allowance value accordingly.
  • Final year payment is calculated in exactly the same way as first year payment, using all of these steps.
  • Avoid rounding to too few decimal places during calculation, which can result in an incorrect final answer. If in doubt, work with more decimal places than seem necessary.

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