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Calculation of Salary


Monthly wages

For the purpose of calculating salary, a ‘month' or ‘complete month' refers to any one of the months in the calendar year.

An incomplete month of work is one where an employee:

  • starts work after the first day of the month;
  • leaves employment before the last day of the month;
  • takes no-pay leave of one day or more during the month; or
  • is on reservist training during the month.

Salary payable to a monthly-rated employee for an incomplete month of work is calculated using the formula below:

Salary payable for incomplete month of work = Monthly gross rate of pay1
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Total number of working days in that month2
x Total number of days the employee actually worked in that month3

1 Refers to the total amount of money including allowances payable to an employee for working for one month, excluding:

  1. Additional payments by way of:
    • overtime payments;
    • bonus payments; or
    • annual Wage Supplements;
  2. Any sum paid to the employee for reimbursement of special expenses incurred by him/her in the course of employment;
  3. Productivity incentive payments; and
  4. Travelling, food or housing allowances.

2 Excludes rest days, non-working days but includes public holidays. For employees with a fixed rest day on Sunday and/or non-working day on Saturday, the total number of working days per month, for year 2014, is xlstabulated in this table

3 Includes public holidays, paid hospitalisation leave or annual leave if entitled.

If the number of working hours in any working day is five hours or less, it shall be regarded as a half-day. If it is more than five hours, it shall be regarded as one working day.


Daily wages


Basic rate of pay

There are two ways to calculate daily wages: the basic rate of pay, and the gross rate of pay.

Basic rate of pay is used to calculate pay for work on a rest day or public holiday.

For a monthly-rated employee, the basic rate of pay for one day is calculated as follows:

12 X monthly basic rate of pay
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52 X average number of days an employee is required to work in a week

For a piece-rated employee, the basic rate of pay for one day is calculated as follows:

Total pay earned (without allowance) during the 14 calendar days immediately before a rest day/public holiday/outpatient sick leave
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Number of days worked during the same period of 14 calendar days

The basic rate of pay includes wage adjustments and increments that an employee is entitled to under his/her contract of service, but it excludes the following:

  1. Additional payments by way of:
    • overtime payments;
    • bonus payments; or
    • annual Wage Supplements;
  2. Any sum paid to the employee for reimbursement of special expenses incurred by him/her in the course of employment;
  3. Productivity incentive payments; and
  4. Any allowance however described.

Gross rate of pay

The Gross rate of pay is used to calculate:

  1. salary in lieu of notice of termination of service;
  2. salary deduction for unauthorised absence from work;
  3. paid public holidays; and
  4. approved paid leave including:
    • annual leave;
    • hospitalisation leave; and
    • maternity leave.

For a monthly-rated employee, the gross rate of pay for one day is calculated as follows:

12 X monthly gross rate of pay
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52 X average number of days an employee is required to work in a week

For a piece-rated employee, the gross rate of pay for one day is calculated as follows:

Total pay earned (with allowance) during the 14 calendar days immediately before a rest day/public holiday/outpatient sick leave
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Number of days worked during the same period of 14 calendar days

The Gross rate of pay should include allowances that an employee is entitled to under his/her contract of service, but it excludes the following:

  1. Additional payments by way of:
    • overtime payments;
    • bonus payments; or
    • annual Wage Supplements;
  2. Any sum paid to the employee for reimbursement of special expenses incurred by him/her in the course of employment;
  3. Productivity incentive payments; and
  4. Travelling, food or housing allowances.
Last updated on 07 January 2014 06:50:31