I didn't realize it's been over a year since my last post. Most of the code I've written this past year has been too specialized to be considered useful to anyone outside of my present employer, but this week I was presented with a problem with our Intranet application where the annual salary of employees who are paid hourly was not being calculated correctly. I'm working with the application vendor to get this corrected in the next version, and learned some interesting things about how to calculate this correctly.

A common formula to calculate annual salary for hourly employees is hourly pay × 40 hours/week × 52 weeks/year. This is very close to accurate, but 365/366 days per year does not divide evenly by 7 days/week.

A more accurate result can be obtained by multiplying the hourly pay by the number of working hours in a year. One way to calculate this is based on the last day of the year. In a non-leap year, there are 2080 working hours if the last day of the year is a Saturday or Sunday, and 2088 working hours if the last day of the year is a weekday. In the case of a leap year, there are 2080 working hours if the last day of the year is a Sunday, 2088 working hours if the last day of the year is a Saturday or Monday, and 2096 working hours for any other weekday.

At our company, we work 8 hours each day, so we can calculate the number of working days rather than the number of working hours and multiply by 8 hours/day. Since the number of days per month is variable, I decided to calculate working days per month separately and sum them up for working days per year.

`Function WorkingDays(someYear, someMonth)`

`WorkingDays = 0`

`For i = 1 To MonthDays(someYear, someMonth)`

`If Weekday(DateSerial(someYear, someMonth, i)) <> 1 And Weekday(DateSerial(someYear, someMonth, i)) <> 7 Then`

`WorkingDays = WorkingDays + 1`

`End If`

`Next`

`End Function`

You can take the result and multiply by 8 hours/day to get the number of working hours in a month, and then multiply by the hourly pay to get the monthly salary. The annual working days can be obtained by calling the function in a `for i = 1 to 12...next`

loop, multiplied by 8 hours/day to get the number of working hours in a year, and then multiplied by the hourly pay to get the annual salary.

We ignore holidays and vacation days since the employee is paid for those as well, though technically vacation pay is accured at 4% so you could subtract vacation days (probably either 10 or 15, depending on number of years of service) and multiply by 1.04 to get an even more accurate amount for annual salary.

## No comments:

Post a Comment