{"id":7870,"date":"2021-10-26T21:52:04","date_gmt":"2021-10-26T13:52:04","guid":{"rendered":"https:\/\/www.workstem.com\/?p=7870"},"modified":"2024-11-04T15:16:25","modified_gmt":"2024-11-04T07:16:25","slug":"payroll-calendar-day-working-day-average-annual-working-day","status":"publish","type":"post","link":"https:\/\/www.workstem.com\/hk\/en\/blog\/payroll-calendar-day-working-day-average-annual-working-day\/","title":{"rendered":"How to Distinguish Between Periodic Calendar Day, Working Day or Average Annual Working Day?"},"content":{"rendered":"<div class='post-index' id='post-index'><a href='###' id='post-index-close'><i class='fa fa-list'><\/i><\/a>\r\n\t\t\t\t<h3 class='post-index-title'>Chapter catalogue<\/h3>\r\n\t\t\t\t<div class='post-index-inner' id='post-index-inner'>\r\n\t\t\t\t<ol class='post-index-list'><li class=\"post-index-item\" data-tt=\"title-idx-0\" ><a href=\"###\"title=\"Does the Employment Ordinance Stipulate How to Pay?\">Does the Employment Ordinance Stipulate How to Pay?<\/a><\/li><li class=\"post-index-item\" data-tt=\"title-idx-1\" ><a href=\"###\"title=\"Three Different Salary Calculation Methods\">Three Different Salary Calculation Methods<\/a><\/li><li class=\"post-index-item\" data-tt=\"title-idx-2\" ><a href=\"###\"title=\"How to Use Workstem to Do Payroll Accurately?\">How to Use Workstem to Do Payroll Accurately?<\/a><\/li><\/ol>\r\n\t\t\t<\/div><\/div>\r\n\t\t\t<script>\r\n\t\t\t$(function(){\r\n\t\t\t\tvar contIdxHeight = $('#post-index-inner').height()+20;\r\n\t\t\t\t$('#post-index-inner').css('height',contIdxHeight+'px');\r\n\t\t\t\t$('#post-index-close').on('click',function(){\r\n\t\t\t\t\tif($('#post-index-inner').height()>20) {\r\n\t\t\t\t\t\t$('#post-index-inner').css('height',0);\r\n\t\t\t\t\t\t$('#post-index-inner').css('padding-top',0);\r\n\t\t\t\t\t} else {\r\n\t\t\t\t\t\t$('#post-index-inner').css('height',contIdxHeight+'px');\r\n\t\t\t\t\t\t$('#post-index-inner').css('padding-top','20px');\r\n\t\t\t\t\t}\r\n\t\t\t\t});\r\n\t\t\t\t$('.post-index-item').on('click',function(){\r\n\t\t\t\t\tvar tt=$(this).data('tt');\r\n\t\t\t\t\tscrollPosition(document.getElementById(tt));\r\n\t\t\t\t});\r\n\t\t\t});\t\r\n\t\t\t<\/script><div class='post-content-full'><p>When David was onboarding a new partner, he found that due to the nature of the work and the corporate management system, HR and the employers would use different methods to do the payroll.<\/p>\n<p>There was once an HR from a steakhouse complaining when he was calculating the salary of a part-time employee, \u201cBecause the working day of each month is different, the holiday of the month and unpaid leaves they took also has to be deducted. Checking that again and again is really nerve-wracking!\u201d<\/p>\n<p>In this article, David will disassemble for you the use of different methods of calculation in various scenarios, so that the salary is not counted too much!<\/p>\n<h2 id=\"title-idx-0\" class=\"icon-anchor\">Does the Employment Ordinance Stipulate How to Pay?<\/h2>\n<p>According to the law, both parties can set appropriate terms and conditions on their own <strong>without violating the provisions of the Employment Ordinance<\/strong>. <span style=\"color: #3366ff\"><a style=\"color: #3366ff\" href=\"https:\/\/www.labour.gov.hk\/eng\/public\/wcp\/ConciseGuide\/02.pdf\" target=\"_blank\" rel=\"noopener\">The labor law<\/a><\/span> stipulates that the contract should contain the following details:<\/p>\n<p>1. Wage rate, overtime wage rate and any allowance (whether calculated<strong> by piece, work, on time, day, week or other methods<\/strong>);<\/p>\n<p>2. Wage period;<\/p>\n<p>3. The notice period required to terminate the contract; and<\/p>\n<p>4. If the employee is entitled to year-end remuneration, information about the year-end remuneration, part of the year-end remuneration and payment period.<\/p>\n<p><strong>In addition<\/strong>, when an employee signs a written employment contract before the start of employment, if the employment contract is concluded in an unwritten form, the employer must, after receiving the employee\u2019s written request before the start of the employment, send a notice containing the above conditions to the employee .<\/p>\n<p>In other words, no matter how you choose to calculate the employee\u2019s salary, the Labour Department does not have mandatory requirements for calculation based on Calendar Day, Working Day, or annual average working days. The employer may decide based on the company\u2019s relevant salary regulations and whether employees are paid for their rest days. However, the employer or HR must specify the employment conditions with the employee in advance.<\/p>\n<p>After understanding the relevant provisions of the Employment Ordinance, let David explain three different methods of calculating wages for us!<\/p>\n<p>&nbsp;<\/p>\n<h2 id=\"title-idx-1\" class=\"icon-anchor\">Three Different Salary Calculation Methods<\/h2>\n<h3>1. Calendar Day<\/h3>\n<p>Calendar day is the number of days on the calendar for employees to calculate salary, and in this case, rest days are generally paid. For example, in the service industry, when most companies take a single day off for employees per week or give them 6 days in total per month, we should calculate employees based on Calendar Day.<\/p>\n<p>Let\u2019s see how David calculates Long\u2018s August\u2019s salary under the calendar day\u2019s salary calculation method!<\/p>\n<p>Assumption 1:<\/p>\n<p>Long is an employee who joined a steakhouse on August 22, 2021. The salary is HK$10,000 per month and he is entitled to 1.5 days of paid vacation after working five days a week. So how should HR calculate his first month\u2019s salary from August 21 to August 31?<\/p>\n<p><strong>David<\/strong>: \u201cBecause Long is a full-time employee with a monthly salary, we use the calendar day method of calculation.\u201d<\/p>\n<p>First calculate the average daily salary, and then multiply it by the combined workdays and rest days of the Long.<\/p>\n<p>Finally, it is calculated that the employer should pay HK$3,225.8 to Long.<\/p>\n<p>The formula is: HK$10,000\/31*(5+1.5+3.5)=HK$3,225.8<\/p>\n<h3>2. Working Day<\/h3>\n<p>Compared with calendar days, working days exclude the days of Saturday and Sunday, so the number of working days in each month is basically in the range of 20-23 days. This payroll method is more suitable for part-time employees who are paid on a daily basis.<\/p>\n<p>Assumption 2:<\/p>\n<p>Chen joined a store as a salesman as a part-time employee on August 18, 2021, with a daily salary of HK$200 and no pay on rest days. Suppose he works every Monday, Wednesday, and Friday, and he is full attendance by the end of the month. So how to calculate his first month\u2019s salary?<\/p>\n<p><strong>David<\/strong>: \u201cIt\u2019s too simple! Since Chen has no pay on weekends, we use working days to calculate salary for him.\u201d<\/p>\n<p>Multiplying the number of working days by the daily salary can easily get the total amount of HK$1,600. Calculation formula: HK$200*8=HK$1,600<\/p>\n<p>Assumption 3:<\/p>\n<p>Similarly, if Chen was employed in this store on August 27, 2021 as a full-time monthly employee, the monthly salary is HK$15,000 and there is no paid rest day. So in the case of Chen\u2019s full attendance, how do we calculate his first month\u2019s salary?<\/p>\n<p><strong>David<\/strong>: \u201cAlthough Chen is a full-time monthly salary employee, because his rest days are not paid, the method of calculating salary on working days is still applicable.\u201d<\/p>\n<p>After calculating Chen\u2019s average wage in August, multiply it by the number of working days to get the answer!!<\/p>\n<p>After calculation, the employer should pay him HK$2,727.2. The formula is HK$15,000\/(31-9)*4=HK$2,727.2<\/p>\n<h3>3. Annual average working days<\/h3>\n<p>Compared with calendar days and working days, this method is more suitable for office employees or managers who work from Monday to Friday. That is to say, after subtracting paid rest days and statutory holidays from the 365 days of the year, the average monthly working days will be 21.75.<\/p>\n<p>Office employees or managers who do not have flexible schedules from Monday to Friday do not need to use the relatively complicated calendar day or working day to calculate their salaries, which greatly reduces the intensity of the calculation. So let\u2019s take a look at the related example below.<\/p>\n<p>Assumption 4:<\/p>\n<p>Jayson is an HR who joined Office A on January 3, 2020, with a monthly salary of HK$30,000. He took 4 days of unpaid leave from January 13, 2020 and continued to work on the 17th. How should we calculate his first month\u2019s salary?<\/p>\n<p><strong>David<\/strong>: \u201cThis question is still pretty interesting, but don\u2019t panic, let\u2019s see how I can solveit!\u201d<\/p>\n<p>When it is known that Jayson has no flexible schedule and paid rest days, it is calculated based on the annual average working days.<\/p>\n<p>First, calculate the average daily salary: HK$30,000\/21.75=HK$1,379.31<\/p>\n<p>Employees should deduct wages: HK$1,373.31 (average daily wages) * 4 (number of days of leave) = HK$5,517.24<\/p>\n<p>Periodic basic salary of the current month: 21 (working days)\/21.75 (average monthly working days) *HK$30,000 (monthly salary) =HK$28,965.52<\/p>\n<p>So the actual basic salary of the month: HK$28,965.5-HK$5,517.2=HK$23,448.3<\/p>\n<p><strong>David<\/strong>: \u201cHuh, don\u2019t let me deal with such a complicated problem next time! Even the simplest calculations related to fixed salary, we also need to have a comprehensive understanding of labor laws. \u201c<\/p>\n<h2 id=\"title-idx-2\" class=\"icon-anchor\">How to Use Workstem to Do Payroll Accurately?<\/h2>\n<p>When employers actually do the <span style=\"color: #3366ff\"><a style=\"color: #3366ff\" href=\"https:\/\/www.workstem.com\/hk\/en\/product\/payroll\/\" target=\"_blank\" rel=\"noopener\">payroll<\/a><\/span> themselves, they will definitely encounter more complicated situations than these examples. At this time, if there is a human resource management tool that can quickly deal with these headaches and speed up the efficiency of the employer in dealing with trivial and complex matters, it is especially important.<\/p>\n<p>Workstem is committed to providing users with new ideas for solving HR problems. Employers or HR can set up personalized compensation rules with one click based on the company\u2019s internal compensation policies and employee types. Then the powerful system background performs calculations to achieve punctual, fast, and error-free hourly\/weekly\/monthly wage delivery.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-19745\" src=\"https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-2-min-2-e1682237469632.png\" alt=\"Payroll steps 1\" width=\"790\" height=\"341\" srcset=\"https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-2-min-2-e1682237469632.png 1600w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-2-min-2-e1682237469632-300x129.png 300w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-2-min-2-e1682237469632-1024x442.png 1024w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-2-min-2-e1682237469632-768x331.png 768w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-2-min-2-e1682237469632-1536x662.png 1536w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-2-min-2-e1682237469632-624x269.png 624w\" sizes=\"auto, (max-width: 790px) 100vw, 790px\" \/><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-19751\" src=\"https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-3-min-1-e1682237498416.png\" alt=\"payroll steps 2\" width=\"790\" height=\"339\" srcset=\"https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-3-min-1-e1682237498416.png 1600w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-3-min-1-e1682237498416-300x129.png 300w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-3-min-1-e1682237498416-1024x439.png 1024w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-3-min-1-e1682237498416-768x329.png 768w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-3-min-1-e1682237498416-1536x659.png 1536w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-3-min-1-e1682237498416-624x268.png 624w\" sizes=\"auto, (max-width: 790px) 100vw, 790px\" \/><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-19753\" src=\"https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-4-min-1-e1682237123625.png\" alt=\"payroll steps 3\" width=\"790\" height=\"341\" srcset=\"https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-4-min-1-e1682237123625.png 1600w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-4-min-1-e1682237123625-300x129.png 300w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-4-min-1-e1682237123625-1024x442.png 1024w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-4-min-1-e1682237123625-768x331.png 768w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-4-min-1-e1682237123625-1536x662.png 1536w, https:\/\/www.workstem.com\/wp-content\/uploads\/2021\/10\/pasted-image-0-4-min-1-e1682237123625-624x269.png 624w\" sizes=\"auto, (max-width: 790px) 100vw, 790px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p>In addition to calculating annual leave pay, the Workstem system can also provides a full range of solutions to help you to management of other HR processes, such as<span style=\"color: #3366ff\"><a style=\"color: #3366ff\" href=\"https:\/\/www.workstem.com\/hk\/en\/product\/rostering\/\" target=\"_blank\" rel=\"noopener\"> Rostering<\/a><\/span>\u3001<span style=\"color: #3366ff\"><a style=\"color: #3366ff\" href=\"https:\/\/www.workstem.com\/hk\/en\/product\/attendance-management\/\" target=\"_blank\" rel=\"noopener\">Attendance<\/a><\/span>\u3001<span style=\"color: #3366ff\"><a style=\"color: #3366ff\" href=\"https:\/\/www.workstem.com\/hk\/en\/product\/leave\/\" target=\"_blank\" rel=\"noopener\">Leave<\/a><\/span>, MPF and <span style=\"color: #3366ff\"><a style=\"color: #3366ff\" href=\"https:\/\/www.workstem.com\/hk\/en\/product\/tax-reporting\/\" target=\"_blank\" rel=\"noopener\">tax<\/a><\/span> return management, etc., help you can truly realize digital transformation and improve management efficiency and employee satisfaction.<\/p>\n<p><i><span style=\"font-weight: 400\">Read More:<\/span><\/i><br \/>\n<a href=\"https:\/\/www.workstem.com\/hk\/en\/blog\/employee-terminate-with-untaken-annual-leave\/\"><i><span style=\"font-weight: 400\">How to Calculate Annual Leave Payment on Termination of Employment Contract?<\/span><\/i><\/a><br \/>\n<a href=\"https:\/\/www.workstem.com\/hk\/en\/blog\/how-paid-annual-leave-should-be-calculated\/\"><i><span style=\"font-weight: 400\">How Paid Annual Leave Should Be Calculated?<\/span><\/i><\/a><br \/>\n<a href=\"https:\/\/www.workstem.com\/hk\/en\/blog\/annual-leave-policy-hong-kong\/\"><i><span style=\"font-weight: 400\">How to Set an Annual Leave Policy?<\/span><\/i><\/a><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Chapter catalogue Does the Employment Ordinance Stipulate How to Pay?Three Different Salary Calculation MethodsHow to Use Workstem to Do Payroll Accurately? When David was onboarding a new partner, he found that due to the nature of the work and the corporate management system, HR and the employers would use different methods to do the payroll&#8230;.<\/p>\n","protected":false},"author":11,"featured_media":19755,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[272],"tags":[468,415,463],"class_list":["post-7870","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-all-en","tag-onboarding","tag-payroll"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How to Distinguish Between Periodic Calendar Day, Working Day or Average Annual Working Day? - Workstem<\/title>\n<meta name=\"description\" content=\"In this article, we will disassemble for you the use of different methods of calculation in various scenarios.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.workstem.com\/hk\/en\/blog\/payroll-calendar-day-working-day-average-annual-working-day\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to Distinguish Between Periodic Calendar Day, Working Day or Average Annual Working Day? 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