## Tuesday

### Daily Rate

Question:
The formula used in my company to obtain the daily rate of pay is wrong.
For e.g, one staff with a basic salary of \$1,430, his/her daily rate is calculated using this formulae of monthly rate * 12/314

And if staff were to take no pay leave, we just need to calculate the days of no pay leave using the daily rate, and deduct from the monthly rate.

My questions are

1) Is this the right way to calculate, as i suppose there is another way for an more accurate calculations.
2) The formulae of monthly rate * 12/314, which i suppose is wrong
3) If this is the company practice since day one, then how are we suppose to change it?

1) There are 3 ways to obtain the daily rate salary, all for different purposes:
Condition A
For incomplete month of service (new joiner or resignee), unpaid leave, NS leave:
(Total no. actual worked / total no. working days in a month) x monthly salary

Condition B
To calculate payment in lieu of notice, deduction pay for each day of absence, pay annual leave in lieu, encash annual leave
(12 / 52 x number of working days required to work in a week) x monthly salary

Condition C
To calculate overtime
(12 / 52 x number of total working hours in a week) x monthly salary

2) For purpose of calculating unpaid leave, it should use Condition A above in answer (1). As such, the formula you used is incorrect.

I am not sure how the 314 comes about unless you are able to let me know more information about your working hour and working days. You may refer to Condition B and Condition C above to get daily rate for different purposes.

3) Condition A is under Employment Act Section 20A (1) and about the unconsumed annual leave in Condition B is under Employment Act Section 43 (7). Depends who your boss is, you may wish to highlight to your HR Manager about the incorrect formula used and to get proper approval to change the formula.