The Employment Act of 1955 outlines how to determine an employee's ordinary rate of pay.
The act defines normal working hours as the daily hours agreed upon in the employment contract between the employer and the employee, with a limit of no more than 8 hours a day or 45 hours a week.
Act 265, under Section 60I(a), defines “ordinary rate of pay” as the rate of pay that an employee receives for work done during normal hours of work divided by the number of working days in a month.
If you have selected "26 Working Days" option under Profiles > Company Details > Payroll Details:
we use the following calculation formula in Talenox:
Daily rate* = Basic pay / 26
Hourly rate = Daily rate* / working hours per day
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Calculation example:
Basic Pay = RM5,000
Working hours per week = 44
Working days per week = 5
Working hours per day = 8
Daily rate = RM5,000 / 26 = RM192.3076923076
Therefore, Hourly rate (based on daily rate) = RM192.3076923076 / 8 = RM24.0384615384