Regular earnings for employees and contractors on payroll are automatically reduced when their unpaid time-off requests are approved.
Here’s an example where a contractor has two days of unpaid time off.
Once the time-off request is approved, regular earnings for the applicable pay periods are reduced automatically.
Calculating hours and reduced earnings
Time-off requests are made in whole days, and days are converted to hours based on the person’s pay schedule assignment.
In the example above:
The contractor is assigned to a twice-per-month pay schedule or 24 pay periods per year.
There are 11 working days between May 1 and May 15, 2024.
A compensation rate of 10,000 USD per month equals 57.69 USD per hour
With this information, we calculate time-off hours and reduced earnings as follows:
Total number of hours in the pay period
40 hours per week x 52 weeks per year / 24 pay periods per year = 86.67 hours per pay period.
Hours of time off in the pay period
2 days off / 11 working days x 86.67 hours = 15.76 hours
Earnings reduction
15.76 hours x 57.69 USD per hour = 909.10 USD
Note: One day of time off always equals 8 hours when the person is assigned to a weekly or every-other-week pay schedule.
Other things to note
Unprocessed payroll is updated immediately if the time-off request is canceled or modified. Manual corrections are required if there are mistakes with processed payroll.
When unpaid time off spans more than one pay period, regular earnings are reduced appropriately in each pay period.
When unpaid time off spans multiple compensation rates in the same pay period, the earnings reduction is displayed using a blended rate.
Questions?
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