Wages

[starsdance]

We are a pre-school that are paid for the hours we work i.e 1st - 19th December to take into account the time off over Christmas. I would like the wages to be changed so we get paid the same amount every month with only adjustments being taken into place. I hope you are still with me :huh:

I know the easiest way to do this is to times by how many weeks we work then divide by 52. But we get holiday pay for 4 weeks that have to be taken in August (so we get a wage packet then) but this is calculated on how many hours have been worked over the year, how long we have worked with the company etc..... So, how can we take that into account when working out a yearly salary.

We are a committee run pre-school so the treasurer is a mum who has only taken over this September and is still fumbling her way round our system. The previous treasurer kept telling me it was too difficult to work out but I think she didn't want to do it :mellow:

 

[lynned55]

I can tell you how we pay our salaries. We (take we to mean I ) take how many sessions per week are being worked x by 38 (or how many weeks you are open) x how much is paid by session. For example 5 x 38 x £30 = £5700 + 5.4 (or whatever is your holiday entitlement) weeks holiday pay, plus we also pay for 10 staff meeting' s per year and 6 cleaning/preparation days but on a different rate than a normal session is. So if the whole amount then comes to £7000 for the year we would then divide by 12 = £583 per month.

Its a pain in the neck come the start of our financial year as each staff member works different days per week and different hours per day. Once it's done its done though for the year and if anyone has a day off they either try and swap or I deduct a day/s salary the following month or add if needs be. At the start of our financial year we set up a monthly SO and its easy now, with internet banking to make any necessary adjustments. I use a brilliant software package (recommended by someone on here) that works out all our tax & NI each month- I think it will work out holidays due as well- certainly works out SSP.

[LKeyteach]

I do just this. All staff have an hourly rate, I multiply this by the no of hours they work a week.

Next I miultiply by 52.

Next add the amount of holiday pay and any extra responsibility payments.

Then divide by 12 (months).

At the beginning of the year I give all staff a statement a calculation showing the working outs.

I have a new payroll person who wants to so adjustments monthly so am now making adjustments for no shows or extra hours worked monthly.

Although it sounds it it isn't complicated. But time consuming to create the calculations at the beginning of the year.

Hope this helps.

I don't if anyone has read about the ruling about back dated holiday pay but this could affect me. Anyone have any thoughts.

[Mouseketeer]

Ours is weekly pay by 38wks, split into 11 months, with month 12 (August) being holiday pay, any overtime/ deductions are included in monthly pay, I,m not sure you can include holiday pay across the year....but that could be wrong

[Foreveryoung]

We are same as above all staff on different hours pain to sort out but worth it. Exact calculation as above....hours per week x weeks per year + holiday pay + extras such as training days if needed % 12 to create 12 equal monthly payments. We are paid basic wage for month we are in (pay day is last fri of month) then any adjustments are made the following month. It's great for staff to know there basic wage each month for all year as long as they are aware of the calculations as they will get a lower wage each month to compensate for the equal 12 payments. The HMRC website have a lovely little entitlement calculator which you enter the yearly hours and it works out your holiday pay entitlement so no long winded calculations needed ! YAY. one thing to bear in mind is that if holiday pay is paid in instalments you do have to show this on the wage slip as a clear payment not just in total basic wage as it's an employers duty to show clearly that holiday pay is being paid and that it is shown clearly to the employee on their wage slip. once set up payments are same each month so makes paying staff easier as only alterations are overtime or deductions.

[Mouseketeer]

So what happens if they are paid including holiday pay across the year, then they leave and wouldn't have accrued the amount of holiday pay they've already been paid .....particularly if term time only ?

[Foreveryoung]

I do just this. All staff have an hourly rate, I multiply this by the no of hours they work a week.

Next I miultiply by 52.

Next add the amount of holiday pay and any extra responsibility payments.

Then divide by 12 (months).

At the beginning of the year I give all staff a statement a calculation showing the working outs.

I have a new payroll person who wants to so adjustments monthly so am now making adjustments for no shows or extra hours worked monthly.

Although it sounds it it isn't complicated. But time consuming to create the calculations at the beginning of the year.

Hope this helps.

I don't if anyone has read about the ruling about back dated holiday pay but this could affect me. Anyone have any thoughts.

In what aspect would it affect you as an employer or employee claiming back pay?

[Foreveryoung]

So what happens if they are paid including holiday pay across the year, then they leave and wouldn't have accrued the amount of holiday pay they've already been paid .....particularly if term time only ?

We work sept-aug so main part of working hours are done before the big summer holiday reducing the ability for staff to leave receiving too much holiday entitlement money in comparison to hours worked, if staff leave they obviously have their notice rights to work and adjustments would be made accordingly to their next wage, it's covered in their contracts.

[Inge]

In what aspect would it affect you as an employer or employee claiming back pay?

Holiday pay now needs to include pay for non-guaranteed overtime which was worked by the employee in the 12-week period before the holiday. Non-guaranteed overtime is overtime that the employee is contractually required to work, but which the employer doesn’t promise to offer.

Previously, employers have been paying holiday pay based on an employee’s basic pay but now employers will have to take into account certain types of overtime, and potentially bonus payments and commission, when calculating holiday pay, rather than just considering basic pay.

 

http://www.theguardian.com/small-business-network/2014/nov/07/holiday-pay-ruling-small-businesses

so depending on when holiday is taken could impact on amount paid...

could be sorted by an end of year adjustment to everyone in their wages depending on the hours they work for the 12 weeks before the summer break... unless like our contract was that we were paid one week at Christmas, two at Easter and rest in August... as we worked less hours at the beginning of the year and more as the year progressed it saved the setting money to pay this way.. they did the same as others with the hours per week x 38 weeks, add holiday at basic / 52 weeks.. but they did an adjustment for holiday at the appropriate times... so in effect the above ruling would not affect them as they were already doing it to save money!!

[Guest]

We work 38 weeks a year plus a week extra for cleaning overtime etc. Plus 4.2 weeks HP.

 

So weekly pay x 43.2 weeks divided by 52 fives our weekly pay. Just had thi confirmed as the right way by our Accountants.

[MarshaD]

I'm sure it can be done. I'm probably not the person to tell you how though! We are a term time preschool. I started with the annual salary and worked backwards so I just divide it by 13 (I pay four weekly). I calculated the hourly rate in a similar way to others above using 44 weeks (I thought holiday entitlement was 5.6).

 

I don't understand the non guaranteed overtime.

Edited November 15, 2014 by MarshaD

[Inge]

 

I don't understand the non guaranteed overtime.

In most jobs holiday pay is given when they book time off ... so the amount they are paid should be calculated on the hours and amount they were paid over the 12 week period before, including overtime or extra hours... not on a basic salary ..so if they worked 10 hours overtime in that period their holiday pay should be more..to include that overtime money... this can be backdated so some employers are getting huge bills for holiday pay .

In a term time setting it should be agreed what period the holiday pay is covering... usually month of closure over the summer.. and the amount that gets paid should be calculated on the 12 week period before the agreed time.. so if a staff member does extra hours in July over and above their normal ones..they should have more holiday pay .. hence the way ours was set up.. to at set weeks during the year , kept the bill down as we all did lots of extra hours in July

[Mouseketeer]

Does it also work that if someone has earnt less than basic salary in the agreed period their holiday pay would be less ?

 

Have any of you started on 'work place pensions' yet and how is working out ? Just another expense small business' can ill afford

[Guest]

We do ours the same way as Lynned55

[Inge]

Does it also work that if someone has earnt less than basic salary in the agreed period their holiday pay would be less ?

 

 

Yes it does work the other way too...

[LKeyteach]

Does it also work that if someone has earnt less than basic salary in the agreed period their holiday pay would be less ?

 

Have any of you started on 'work place pensions' yet and how is working out ? Just another expense small business' can ill afford

[LKeyteach]

We don't have to join work place pensions yet think it is a year or two away. Sorry away from the office so can't get hold of the info. But I know that I have subscribed to pensions regulator and they send out regular updates.

[Mouseketeer]

i think we're early 2016....but that will soon get here

[MarshaD]

Thanks Inge. Makes sense now.

 

Was planing to start pensions in September but it has taken longer to set up than anticipated. As it happens the staff don't seem hugely concerned.

[tish501]

Hi I now have 7 staff...2 new, to look after children in new room....so have not worried too much about it up till now,as only 5 staff...but looked into it...and my staff were not unduly worried about starting a pension.....lucky for me really....but on a personal note.....my husband started a personal pension with Standard Life in 1984.....retired last year....he paid in to them for 25 years......and now will never see his return materialise since they invested so badly the payout is minimal....and just last week the tax office sent him a reduced tax code to accommodate his extra income to he now has to pay tax on it....so complicated but definitely NOT worth having a pension....more beneficial to save diligently at a bank etc....they will not worry about looking after your money......you have to.....

[starsdance]

Thank you for all your replies - I hadn't forgotten I had started this honestly....... but I do like the way that Mouseketeer does it by doing it for 11 months then the 12 month August is left as normal to be calculated in the complicated way it is.

Will pass this on to my treasurer and see if it can be started - might have to wait until next year now!!! It would just be nice to get a regular pay cheque every month with adjustments taken into account. We are only a very small staff team so adjustments do not happen very often unless like last week we worked nearly 9 hours on Monday as we had little visitors that need getting rid of!