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Accounting, Payroll & Pension Issues/Non-Exempt Salaried Employee Partial Payroll Calculation


QUESTION: I have a question about what I have been told by my HR/Payroll department about my first and last pay-periods' paychecks; these are partial pay-period checks based on the day I began and the day I will leave my job. I am a non-exempt salaried employee.

They have said that pay is determined by averaging out the 2080 yearly hours into 24 pay-periods = 86.67 hours per pay-period. From that, they deduct the hours NOT worked and then take the remainder and multiply that by my hourly rate.

So, when I started work here, I worked 4 days of a 12 day pay-period. I worked 32 hours and did not work 64 hours. So they deducted 64 hours from the 86.67 allotted and only paid me for the remaining 22.67 hours and not the full 32 hours that I did work. (When I leave at the end of the month, I will be working 8 days of the the 12 day pay period and they will only pay me 54.67 hours instead of the 64 worked based on this same method.)

When I pressed them about the possibility of an employee only working one day of the pay period, meaning that they would actually owe the company money using this calculation, they said that obviously that employee would have to be compensated for the time they worked and would therefore get paid for the time that they did work and not deducted for the time that they did not. So why not use this same method for everyone?

So, my question is, federally or for the City of New York, what is the method for calculating a non-exempt salaried employee's first and final pay based on working a partial pay-period? Everything that I have read states that non-exempt (salaried or not) MUST be paid for the hours worked at 100%. Thanks.

ANSWER: I would pay on days for salaried exempt. I try to stay away from hours because hours are used to pay hourly employees.

Salaried exempt semi-monthly employees receive a fixed salary, which is not based on hours worked.  To prorate the salary, divide the employee’s annual salary by the number of paid workdays for the year. Semi-monthly salaried employees are usually paid for 260 days a year, which is 52 weeks multiplied by five days per week.

A semimonthly payroll happens twice every month, such as on the 15th and the last day of the month. Assume that for your upcoming payroll on the 15th, the pay period for salaried employees runs from the first to the 15th. An employee was hired on the 11th of the month, which falls on a Monday. Pay her for five days, which is Monday through Friday, on the upcoming payroll. Let’s say you agreed to pay her an annual salary of $50,000. To arrive at her daily rate, divide $50,000 by 260 days to get $192.31. To arrive at her salary for the pay period, multiply $192.31 by five days, which amounts to $961.55.


---------- FOLLOW-UP ----------

QUESTION: Hi Shirley,

I'm actually non-exempt. How does this work then? I understand and agree with what you say here but my employer does the system I mentioned above where they deduct the hours not worked from the 86.67 average payperiod time. They will not compensate at 100% for the days actually worked, but will only pay you the balance when the time not worked is deducted from the 86.67 hours. For example: This payperiod has 12 days, 96 hours total. But they still use the 86.67 hours system, meaning that the extra 9.333 hours are free to them. But they're deducting that from my paycheck instead of paying me properly for the full time that I did work. How do I fight them on this to be paid properly? They did this to me when I started work here and after fighting them for a few weeks they stopped responding to me and I know that they are planning on doing this to me again.

Maybe you can get away with this for exempt employees (even though it's still unfair) but since i'm non-exempt, I have to be compensated for every single hour that I work, correct?

If you are an hourly employee you are paid by the hour and should be paid for all the hours worked.

Here is a site where it will explain your rights and also where you can file a complaint if you are not paid properly. It is not legal to pay an hourly non exempt employee on the salaried exempt calculations.


Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR


I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.


25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.


I.O.M.A. and BNA

P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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