If you have salaried employees, specific circumstances might require that you prorate their pay according to their daily rate. This may happen if an employee doesn’t work the entire week during the first and last week of employment or took more benefit days than she has available, or if you need to offset payments made for jury or witness duty. If you have hourly employees, you don't need to calculate their daily rate, as deductions are made according to their work hours.

Determine the annual salary rate; the amount you agreed to pay the employee for the entire year, such as annual salary of \$50,000.

Divide annual salary by the number of pay periods in the year to arrive at the salary for the pay period. A monthly payroll has 12 payrolls, a semi-monthly payroll has 24, a biweekly payroll often has 26, and a weekly payroll has 52. For example, \$50,000 divided by 52 equals \$961.54, which is the employee’s weekly salary. Note that a biweekly payroll has 27 pay periods during leap years, which happen approximately every four years.

Divide annual salary by the number of work days in the year to arrive at daily rate. For example, \$50,000 divided 260 work days equals daily rate of \$192.31. This number of work days is based on a five-day workweek with eight hours per day and paid holidays; however, work days sometimes vary by employee. Note that there are typically four years with 262 workdays, 17 years with 261 days and seven years with 260 days.

Tip

To arrive at hourly rate for a salaried employee, divide the daily rate by the number of hours work hours for the day. For example, \$192.31 divided by 8 equals hourly pay of \$24.04.