If you are tracking labor costs on a daily or weekly basis, it is helpful for you to know how much you pay employees each day. Another reason you might want to know the daily pay rate for your employees is to gauge how much you should pay a part-time worker or a consultant who works for a firm, fixed price rate for a full day.
However, determining an employee's daily equivalent salary might not be as simple as you think. Follow these steps to get an accurate calculation of an employee's average daily salary.
Determine Employee Annual Salary
Check with your human resources department or payroll clerk, which should maintain data on employees' current pay rates. When you confirm the employee's pay rate, ensure that you have the correct rate. Also make sure that it doesn't include commission payments or discretionary payments, such as a bonus. Use the base amount only to achieve accurate calculations.
Determine the Hours Worked Each Year
There have been several discussions about how many hours full-time employees actually work. The U.S. Office of Personnel Management rules are based on 2,087 hours per year, and there are private-sector employers who undoubtedly follow the federal government's direction.
However, for mathematical ease, many employers stay with the 8-hour day, five days a week, 52 weeks a year to arrive at the usual 2,080-hour work year (8 x 5 x 52 = 2,080), according to Balanced Comp.
If you're one of the companies influenced by the French movement to 35-hour work weeks, then your employees work 7-hour days, and the annual number of hours worked is 1,820 (7 x 5 x 52 = 1,820).
Calculating the Daily Rate
AccountingTools describes several methods of calculating an employee's annual earnings. Say your employee earns $50,000 a year, and she works a 40-hour week, her hourly pay is the annual amount divided by 2,080 hours (50,000/2,080 = 24.038, which you can round up to 24.04). For the employee's daily rate of pay, simply multiply 24.04 by the number of hours worked each day. In this case, the employee's daily rate is $192.32 (24.04 x 8 = 192.32).
If you pay the same salary to an employee who works 35 hours a week, the hourly rate is obviously going to be slightly higher. Divide 50,000 by 1,820 (50,000/1,820 = 27.472), and the hourly rate is $27.472, which you should round down to $27.47. Remember, the daily rate is based on seven - not eight - hours, so the daily rate for this employee who works seven hours a day is $192.29 (27.47 x 7 = 192.29).
When to Use the Daily Rate
Aside from tracking labor costs on a daily or weekly basis, you can use an employee's daily rate to determine how much you should offer a consultant for a day's pay, for example. Of course, your employee pay is based on your costs for insurance and your employer tax contributions (usually, federal and state unemployment taxes). But this daily rate could be a starting point, because a consultant will likely charge more than the typical employee daily rate.
FAQs
Calculating the Daily Rate
How to calculate a daily salary? ›
To compute your salary per day, divide your annual salary by the total number of working days in the year.
What is the formula for calculating the daily rate of pay? ›
Get Hourly Pay = Monthly Salary ÷ Hours Per Month. Get Daily Pay = Hourly Pay x Hours Per Day.
How do you calculate daily average earnings? ›
The ADW calculated is the rate of pay reflected in the system. This is the formula used: Total Wage (for the relevant period) / Number of Days (same relevant period)
How do you convert monthly salary to daily rate? ›
To calculate the daily rate, divide the monthly salary by the number of days worked.
How much is $400 a day annually? ›
$400 daily is how much per year? If you make $400 per day, your Yearly salary would be $104,047. This result is obtained by multiplying your base salary by the amount of hours, week, and months you work in a year, assuming you work 40 hours a week. How much tax do I pay if I make $400 per day?
What is the formula for daily average rate? ›
Calculating the average daily rate of a property is straightforward. To calculate ADR, divide total room revenue by the number of rooms sold. The figures used should be for whatever time frame is being analyzed, whether that's a week, month, quarter, year, or some other period.
What is the formula for daily percentage rate? ›
If your current balance is $500 for the entire month and your APR rate is 17.99%, you can find your daily periodic rate by dividing your current APR by 365. In this case, your daily APR would be approximately 0.0492%. By multiplying $500 by 0.00049, you'll find your daily periodic rate is $0.25.
What is the formula for available daily rate? ›
The formula for ADR is generally presented as room revenue / number of rooms sold. For example if your hotel earns $5000 from 20 rooms sold, ADR = $250.
How to calculate average daily pay? ›
Average daily pay is the daily average of the employee's total earnings over the past 52 weeks. This is worked out by: adding up the employee's total earnings for the period, and. dividing this by the number of whole or part days the employee either worked or was on paid leave or holidays during that period.
How To Calculate Average Daily Balance? In theory, calculating your average daily balance at any time during the billing cycle is simple, if tiresome. Add up your daily balances from the current billing period and divide by the number of days elapsed in the billing period so far.
How to calculate your average daily rate? ›
The average daily rate is calculated by taking the average revenue earned from rooms and dividing it by the number of rooms sold. It excludes complimentary rooms and rooms occupied by staff.
How to calculate the daily salary? ›
To calculate an employee's salary per day, you will need to know their annual salary and the number of days they have worked. After that, divide their annual pay by 365 (the number of days a year).
What is the formula for daily pay? ›
Calculating the Daily Rate
Say your employee earns $50,000 a year, and she works a 40-hour week, her hourly pay is the annual amount divided by 2,080 hours (50,000/2,080 = 24.038, which you can round up to 24.04). For the employee's daily rate of pay, simply multiply 24.04 by the number of hours worked each day.
How do you calculate daily conversion rate? ›
(conversions/total visitors) x 100 = conversion rate
If, for example, my ecommerce site received 1,500 visitors over a day and 20 of those made a purchase, my conversion rate would be (20/1500) x 100 = 1.3%. This formula can be adapted.
What is the correct way to calculate salary? ›
How to calculate annual income. To calculate an annual salary, multiply the gross pay (before tax deductions) by the number of pay periods per year. For example, if an employee earns $1,500 per week, the individual's annual income would be 1,500 x 52 = $78,000.
How much is $500 a day annually? ›
$500 everyday for a year is equal to $182,500. Making over $180k per year is great for most areas in the USA. However, if you were in my area (SF) or somewhere like Los Altos, CA, that number would be low. Even $1k per day wouldn't be that great.
How to calculate basic salary? ›
Basic Salary = Gross Salary - (All the allowances + benefits + bonuses, etc.) I.e., Basic Salary = 10,00,000 - (1,00,000 + 1,50,000 + 50,000), which is equal to Rs. 7,00,000 and hence the basic salary of Mr A is Rs. 7,00,000.
How to calculate working day rate? ›
The Universal Working Day Rate, Formula Method
If Off-site overheads + Profit are @ 10%pa then for every $100k per month turnover, $10,000 Off-site Overhead + Profit is recovered. Assume 20 working days per month, then $10,000 / 20 = $500 per working day per $100k turnover per month.
