When adding a Salary on a contract for a member of staff, Arbor uses the Hours/FTE Hours per Week and Weeks/FTE Weeks per Year along with the FTE salary value to calculate the base pay for the salary. You can find an explanation of how this is calculated below, along with what to do if your LA or Trust uses a custom method for working out base pay.
Arbor's Default Pay Factor Calculations
When a staff salary is set up, Arbor derives the Basic Pay for the staff member using this calculation:
Base Pay = FTE Salary Value x Pay Factor
- FTE Salary Value is taken either from the salary's linked Spinal Point, or from a Custom FTE salary amount defined by the user.
- The value for the Pay Factor is worked through this calculation:
(Hours per Week / FTE Hours per Week) x (Weeks per Year / FTE Weeks per Year)
You can see an example of this in action below:
- The contract has an FTE Salary Value of £10000
- The staff member works 30.5 hours per week, with an FTE employee working 32.5 hours per week.
- The staff member works 49 weeks per year, with an FTE employee working 52 weeks per year.
The calculation is therefore:
Base Pay = 10000 x ((30.5/32.5) x (49/52))
Base Pay = 10000 x (0.9384615385 x 0.9423076923) = 8843.20
Base Pay = £8,843.20
What if my LA/Trust uses a different Pay Factor calculation?
Some LAs or Multi-Academy Trusts may have payment frameworks that use a different Pay Factor calculation to the one used by Arbor. If this is the case for your LA/Trust, Arbor won't be able to automatically calculate the correct Base Pay for staff - a slightly different setup will be required, which involves setting a specific Custom FTE salary amount.
To give an example:
- A member of staff has base pay of £15300
- They work 23 hours per week, and an FTE member of staff works 37 hours per week.
- They work 52 weeks per year, and an FTE member of staff also works 52 weeks per year.
- An FTE member of staff earns £27000 per year.
Arbor's automatic calculation would assign this staff member a base pay of £16,783.78 based on the FTE Salary x Pay Factor.
The Arbor Pay Factor = (Hours per Week / FTE Hours per Week) x (Weeks per Year / FTE Weeks per Year). For this staff member it's (23 / 37) x (52 / 52) = 23/37 = 0.6216216216.
To get the desired base pay of £15300, we'd need to specify a Custom FTE salary amount, which we can work out using this formula:
- Custom FTE salary amount = Desired Base Pay / Arbor Pay Factor
- Custom FTE salary amount = 15300 / 0.6216216216
- Custom FTE salary amount = 24613.04
If we then set this as the Custom FTE salary amount for the staff member's contract, the base pay will be worked out as £15300.
Comments
Article is closed for comments.