 | Published Date: 19 Dec 2008
FAQ No: 0021
How is the part timers' pro-rata bonus calculated ?
The bonus is worked out on a quarterly basis not an annual aggregate. The system pays out pro-rata of 3 months of each bonus per quarter.
The pro-rata is calculated as follows.
- The system first establishes the period which is to be assessed through the part time dates listed in the bonus support file.
- The system calculates the employee's average weekly hours by adding all the hours worked during the rolls in the required quarter and dividing them by the number of weeks in the period. In case of employees who did not work the entire period the system considers the employment/termination dates as start/end of period.
- The weekly average hours are divided by 40 to give the percentage bonus due.
- This percentage is multiplied by the bonus value a full timer would get for the same period.
NOTES:
Why does the system pay out pro-rata of 3 months of each bonus per quarter instead of pro-rata of 6 months bonus for 1 bonus?
This is mainly because of the bonus of March, which is normally based on the period 1st Oct to 31st March. 3 months of the 6 month bonus period would be in the previous year ( Oct to Dec ). This would imply that in some environments like the hospitality industry where work load is seasonal 6 months pro-rata bonus would be paid according to the hours worked in the last 13 weeks which might happen to be low season so the payment may not reflect the actual average over the 6 months. We had discussed this with the relevant authorities and they agreed that the current solution would be correct as at each quarter all employees would receive what is due to them for the relevant period.
Is the number of weeks based on the number of NI contributions paid or the full number of weeks in the bonus period?
Again we discussed this with the authorities who stated that the law stipulates that the number of weeks is the number of weeks in employment for the period and not the number of NI contributions paid. We realise that in the case of employees who do not work part of the period their average weekly hours will drop as the system still takes into account the full number of weeks in the period but it is functioning according to the letter of the law.
Category: |
Calculation |
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