Our base pay figures aren’t correct

The article explains how Arbor calculates base pay using a specific formula based on hours worked and full-time equivalent (FTE) values. It provides examples to illustrate the calculation of pay factors and how to adjust custom FTE salary amounts to achieve desired base pay figures, especially when different pay factors are used by trusts or local authorities.

Arbor calculates pay factors using the following formula:

1. Hours per Week / FTE Hours Per Week = Pro Rata Weekly Value
2. Weeks per Year / FTE Weeks per Year = Pro Rata Yearly Value
3. Pro Rata Weekly Value x Pro Rata Yearly Value = Pay Factor.

Worked example

Teacher A works 26 Hours per Week, on a contract where FTE employees work 32.5 hours per week. Teacher A works 37 weeks per year, and FTE employees also work 37 weeks per year. 1 FTE is paid 25,000 per year.

26 / 32.5 = 0.8
37 / 37 = 1
1 x 0.8 = Pay Factor of 0.8 or 80%

Arbor then works out their base pay by multiplying the FTE salary by the Pay Factor, so 25,000 x 0.8. This totals out at 20,000 per year base pay for Teacher A.

If your Trust/LA uses a different Pay Factor, you may find that some employees’ Base Pay figure doesn’t appear as you’d expect.

Arbor cannot currently support custom Pay Factors, so to ensure you are able to record the Hours per Week and Weeks per Year accurately for an employee, you will need to use a 'Custom FTE Salary amount' on the employee’s Salary so that Arbor can calculate the base pay figure you desire.

You can work out the necessary Custom FTE Salary amount by applying the following calculation:

Desired Base Pay / Arbor Pay Factor (as a decimal) = Custom FTE Salary amount

Worked example

Teacher B has the following salary details:

• Hours per Week: 30
• FTE Hours per Week: 32.5
• Weeks per Year: 35
• FTE Weeks per Year: 37
• Overall Base Pay: 24,000

Based on these details, Arbor will set the pay factor of the employee as 0.8731809, or 87.3% of an FTE, and if they are on a spinal point set at 24,000, their base pay will be calculated as 20,956.34.

To set the employee a Base Pay of 24,000 we follow the calculation 24,000 / 0.8731809 = 27,485.71

If we set 27,485.1 as the employee’s ‘Custom FTE Salary amount’, the base pay will come out as 24,000. This will then ensure both the Base Pay and Hours per Week/Weeks per Year in the Workforce Census return are correct.