How do I calculate Premium Pay, and what are your Day/Hour Rates?

How do I calculate Premium Pay, and what are your Day/Hour Rates?

Premium Pay is the amount above his regular pay that an employee will be paid for working on a non-regular day.  In Salarium, the premium is determined by a combination of Day Types, Holiday Types and Time Types, as follows:

Day Types

  • Regular - The employee’s scheduled working day.  The employee will not get a premium for working on these days.
  • Rest Day - The employee’s non-working days for the week. The employee is not paid for these days. However, if an employee works on his Rest Day, he is entitled to an additional of 30% of his daily rate or a total of 130% (1.3) of his daily rate

Sample Computation

Monthly Basic Pay: 15000

(Monthly Basic Pay) 15000 X 12 (# of months in a year)  / 260 Days (# of working days in a Year / Day factor)  = 692.31 (Daily Rate)

692.31 X 0.30 = 207.69 (30% Premium pay added)

692.31 + 207.69 = 900.00 (Daily Rate with Rest Day premium)

Holiday Types

  • Non-Holiday - A regular day.  The employee will not get a premium for working on these days.
  • Special Holiday - These holidays are designated “no work, no pay,” meaning employees who do not work on these days are not entitled to compensation by law. However, employees who work on these days are entitled to an additional 30% of their daily rate or a total of 130% (1.3) of their daily rate.

Sample Computation

Monthly Basic Pay: 15000

(Monthly Basic Pay) 15000 X 12 (# of months in a year)  / 260 Days (# of working days in a Year / Day factor)  = 692.31 (Daily Rate)

692.31 X 0.30 = 207.69 (30% Premium pay added)

692.31 + 207.69 = 900.00 (Daily Rate with Special Holiday premium)

  • Regular Holiday - Employees are entitled to at least 100% of their Daily Rate for Regular Holidays even if they do not report for work.  However, employees who work on these days are entitled to an additional 100% of their daily rate or a total of 200% (2x) of their daily rate.

Sample Computation

Monthly Basic Pay: 15000

(Monthly Basic Pay) 15000 X 12 (# of months in a year)  / 260 Days (# of working days in a Year / Day factor)  = 692.31 (Daily Rate)

692.31 X 1.0 = 692.31 (100% Premium pay added)

692.31 + 692.31 = 1384.62 (Daily Rate with Special Holiday premium)

Note: You can determine if employees will get paid for Unworked Regular and Special Holidays.  Please click here for more information.

Note: The system only pays holiday premium pay from midnight to midnight. For employees on night shift, if part of an employee's shift falls after the end of midnight of the holiday, those hours will not be paid premium pay. 

Time Types

  • Regular - The employee’s regular schedule.
  • Night (Night Shift Differential) - Employees who work from 10PM to 6AM  are entitled to an additional 10% of their hourly rate. In Salarium, you can determine the night differential premium, as companies may give more than the 10% premium, as well as setting the hours when your Night Shift starts.  Please click here for additional information.

Sample Computation

Monthly Basic Pay: 15000

(Monthly Basic Pay) 15000 X 12 (# of months in a year)  / 260 Days (# of working days in a Year / Day factor)  = 692.31 (Daily Rate)

692.31 / 8 = 86.54 (Hourly Rate)

86.54 X 0.10 = 8.65 (10% NSD)

86.54 + 8.65 = 95.19 (Hourly rate + 10% NSD)

  • Overtime - Employees who work in excess of their required number of hours worked for the day are entitled to Overtime.  Employees earn an additional 25% to their hourly rate for every Overtime hour worked.  

Sample Computation

Basic pay: 15000

(Monthly Basic Pay) 15000 X 12 (# of months in a year)  / 260 Days (# of working days in a Year / Day factor)  = 692.31 (Daily Rate)

692.31 / 8 = 86.54 (Hourly Rate)

86.54 x 0.25 = 21.64 (25% of the Hourly rate)

86.54 + 21.64 = 108.18 (Hourly rate + 25% Overtime rate)

The premium for working on a particular day can be determined by combining the applicable Day Types, Holiday Types and Time Types, and are known as Day/Hour Rates.  You can edit these rates according to your company policy.

Here are the default rates, for your reference.

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