Pro Rata Salary Calculator: How to Pay Part-Time Employees
So you’ve found the perfect part-time hire… but when you sit down to crunch the numbers, you’re not really sure how to work out what they should actually be getting paid.
Do you include bank holidays?
What if someone joins mid-way through the month?
How do you calculate a pro rata salary?
How do I stay legally compliant?
We get questions like this all the time. So in this guide, we’re here to help! Read on for a simple walkthrough of how to calculate pro rata salaries, key details to consider, and common mistakes to avoid.
What is a pro rata salary?
First things first: let’s start with the basics.
A pro rata salary is a salary that’s adjusted to reflect the proportion of time a part-time employee works compared to someone in the same role who works full-time. In other words, if someone is working half the hours of a full-time employee, they should receive half the annual salary.
Here’s a quick example to illustrate this:
A full-time role pays £32,000 per year for 40 hours a week.
A part-time employee works 20 hours a week (50% of full-time hours).
Their pro rata salary would be 50% of £32,000, which equals £16,000 per year.
The approach is the same for people who work fewer days, such as three days per week instead of five days or shorter daily shifts. You simply work out what percentage of full-time hours they’re contracted to do, and then apply that percentage to their full-time salary.
When do you need to calculate a pro rata salary?
You’ll need to calculate a pro rata salary anytime someone works less than your business’s standard full-time hours, but the scenarios can vary. Here are the most common situations where pro rata pay applies.
Hiring part-time salaried staff
If you’re offering a role on a set number of part-time hours or days per week, then the salary for that role should be calculated in proportion to a full-time equivalent (FTE).
Example: If your standard week is 40 hours and a new part-time hire is scheduled to work 30 hours per week, they’d be on 75% FTE and should receive 75% of the advertised full-time salary.
Adjusting pay when hours change
Sometimes, existing employees reduce their hours after parental leave or if they’re returning to work after being off on long-term sick leave. In this scenario, you need to recalculate their salary to match their new contracted hours.
Example: An employee who previously worked 37.5 hours per week returns from parental leave and agrees to a new contract of 25 hours per week. That’s two-thirds of their original hours, so their salary should be adjusted to 66.7% of their previous full-time salary.
Temporary part-time arrangements
If someone temporarily reduces their hours, for example, due to flexible working or a study programme, then you’ll need to calculate a new (temporary) pro rata salary for an agreed-upon period.
Example: An ageing, full-time employee working 40 hours per week wants to ease themselves into retirement. They agree to work 24 hours a week for six months following the end of their full-time contract. That’s 60% of their full-time hours, so their salary should be adjusted to 60% of their full-time pay for that period.
How to calculate pro rata salary for part-time employees (step-by-step guide)
Once you know the equivalent full-time hours and salary, calculating a pro rata salary is fairly straightforward. Here’s a simple step-by-step method you can use to calculate the salary for any part-time role.
Pro Rata Salary Calculator: Step-by-Step Guide
| Step | Description | Example |
|---|---|---|
| Step 1 | Identify your full-time salary. Start with the gross annual salary for a full-time employee in the role. | £35,000 per year for someone working full-time. |
| Step 2 | Define your standard full-time hours. This might be 37.5 or 40 hours per week depending on your business. | 37.5 hours per week (7.5 hours a day, Monday to Friday). |
| Step 3 | Determine the part-time employee’s contracted hours. This should be clearly stated in their contract. | 22.5 hours per week (3 full days). |
| Step 4 | Work out the percentage of full-time hours. Divide the part-time hours by the full-time hours. | Contracted hours ÷ full-time hours. 22.5 hours (part-time) ÷ 37.5 (full-time) hours = 0.6 (or 60%) of full-time hours. |
| Step 5 | Multiply the full-time salary by the percentage. This gives you the annual pro rata salary. | Full-time salary × percentage of full-time hours. £35,000 (full-time salary) × 0.6 (percentage of full-time hours) = £21,000. |
Common mistakes to avoid when calculating pro rata salaries
Pro rata salary calculations shouldn’t be too difficult once you get the hang of them, but it’s still easy to get tripped up if you’re new to hiring part-time staff or if the terms aren’t clear. Here are a few common pitfalls to be aware of.
Confusing days with hours
A common mistake is calculating pro rata pay based on how many days someone works, without considering the actual hours. For example, someone working three long days might actually be working more than someone doing five shorter days. Always base pro rata calculations on total contracted hours.
Not updating pay after hours change
When an existing employee adjusts their hours, it’s essential to update their employment contract and your payroll records as soon as possible. Without these changes in writing, there’s a real risk of overpaying or underpaying, which can quickly lead to confusion or even disputes.
Even temporary changes (such as phased returns after parental leave or flexible working arrangements) should be documented with a clear start and end date, and the adjusted salary confirmed in writing.
Using the wrong “full-time” benchmark
Pro rata calculations are only accurate if everyone is working from the same baseline. So it’s important to be clear: what does your business define as full-time?
Is it 37.5 hours (common in office-based roles with 30-minute unpaid lunch breaks), or 40 hours (typically eight hours a day, five days a week)? Both are perfectly valid, but you need to choose one standard and apply it consistently, especially if you have a mix of part-time, full-time, and flexible contracts.
Relying on hourly pay as a workaround
It might seem simpler to pay part-time staff by the hour, especially if their schedule varies slightly week to week. But if someone is in a salaried, ongoing role with a regular pattern of hours, an annualised pro rata salary is often the better option.
Why? Because it gives the employee clarity around their pay, supports consistent budgeting for your business, and avoids the feeling of being treated as a casual worker. It also makes it easier to calculate paid holidays, sick pay, and other benefits, which are often harder to manage with fluctuating hourly pay.
Making part-time pay work for everyone
Ultimately, the key to calculating pro rata salaries is to…
Use a clear and consistent method for working out pay.
Communicate that method transparently in contracts and offer letters.
Keep things fair across the board, especially when handling holidays and additional benefits.
For small businesses, getting these basics right can make a big difference. Not only does it reduce the risk of payroll errors or legal disputes, but it also helps build trust, retain good people, and create a workplace that feels fair and well-organised.
Need help creating part-time contracts or calculating pro rata salaries?
Get in touch, and we’d love to help you figure out a system that works best for your business.
