If you’re looking to calculate employees’ weekly pay, then you’ve come to the right place. In this article, we’ll walk you through the process of calculating employees’ weekly pay in Ireland.
We’ll also cover how to calculate employees’ hourly rates, overtime rates and annual salaries.
To calculate your employee’s wages, follow the steps below:
Step 1 – Determine your employees’ gross weekly earnings
Gross weekly earnings Hourly Rate x Hours Worked
Example: An employee earns €10/hour and works 40 hours per week for 4 weeks, this equates to €400/week.
Step 2 – Deduct any deductions
National Insurance Contributions
Tax
Social Welfare Payments
Pension Contribution
Additional Payment
Total Deductions
Example: A deduction of €100 was deducted from the gross weekly earnings.
€100 / 52 €2.08 per day
Step 3 – Convert to a monthly salary
Employee’sgross weekly earnings ÷ 52 Average Full-Time Weekly Earnings Index
Example: AFTE €2.08 ÷ 52 €0.38 per day
Step 4 – Multiply by 12
Employee’s Monthly Salary Gross Weekly Earnings × 12
Example: Gross Weekly Earnings of €400 × 12 €4800
Step 5 – Subtract any statutory holidays
If statutory holidays fall within the period covered by the payroll cycle, they must be included in the calculations.
If statutory holidays fall outside the period covered by the payroll cycle, they should not be included in the calculations.
Example: Statutory Holiday Period 30 days
Statutory Holidays Outside Period 0 Days
Step 6 – Add any bonus
Bonuses are usually paid once a year but may be paid more frequently if agreed with the employee.
Bonus Amount Paid ÷ 365
Example: Bonus of €300 ÷ 365 €8.33
Step 7 – Total
Payroll Year-End Balance
Add all figures together to get the total
Example: Gross Weekly Earnings + Bonuses €4800 + €8.33 €4933.33
Step 8 – Divide by 12
Divide the figure obtained in Step 7 by 12
Example: Gross Weekly Earnings + Bonuses ÷ 12 €49 33.33 ÷ 12 €41.67
Step 9 – Round up to nearest cent
Round up the result obtained in Step 8 to the nearest cent
Example: Gross Weekly Earnings + Bonuses ÷ 12 €4933 .33 ÷ 12 €50 €42.83 rounded up to €43.00
Step 10 – Pay the employee their wage
Calculate the pay rate by multiplying the number obtained in step 9 by the hourly rate (see example above).
Example: Gross Weekly Earnings + Bonuses ÷ 12 €42.83 * €10/hr €4200
Step 11 – Deposit the money
Deposit the amount calculated in Step 10 into the bank account of the employee.
Step 12 – Repeat Steps 1 – 11 until end of year
Repeat Steps 1 – 11 until the end of the calendar year.
Step 13 – End of year
At the end of the year, add up all figures and divide by 12 to obtain the final balance.
On behalf of Ireland Accountant I hope this article was helpful, and should you consider outsourcing your payroll in Ireland, please don’t hesitate to get in touch.