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How To Calculate Average Daily Wage (ADW) for a Part-Time Employee
How To Calculate Average Daily Wage (ADW) for a Part-Time Employee

Calculating ADW for Hourly/Daily paid employees in Talenox

Chloe Ng avatar
Written by Chloe Ng
Updated over a week ago

In Talenox, there are some situations (e.g. Statutory holiday pay) in which you'll need to calculate ADW for employees who are paid a Hourly or Daily wage.

To ensure complete accuracy, there are a few settings and steps you'll need to double-check first before proceeding with your calculations for your part-time employee 👍

1) Ensuring Previous Payroll(s) Is Processed For Your Employees

Usually, the system will use up to 12 months of previous payroll to help calculate ADW accurately. However, if your employee does not have 12 months worth of previous payrolls processed in Talenox, the system will still utilise any past payrolls that are processed to derive the calculations. These will be adjusted according to the number of months processed!

Therefore, please ensure that there is at least ONE MONTH of past payroll processed for this employee for the system to use for calculations.

Previous Payroll Processing

For any previous payrolls, you'll have to ensure that the number of days (highlighted in the screenshot below) is accurately calculated based on the number of hours worked in a month - this will be the number of days that the system will use to calculate ADW for a part-timer.

The number of days above is calculated based on the Hours per day (For Part Time ADW Calculation) in Working Hours settings for your employees. This can be found under Profiles > Company Details > Working Hour Setting.

The system calculates the number of days worked (rounded to the nearest half day) based on this formula here:

  • Total Number of Hours Worked (in that payroll month) / Number of Hours per day

​Here is an example of the calculations done in the system to get the number of days from the figures in the screenshots above:

  • 50 hours / 9 hours per day = 5.5 days (rounded to nearest half day)

NOTE: Ensure that the number of days calculated for all past payrolls is accurate according to the settings in the system for your employee.

2) Checking Your Leave Settings In The System

Next, you'll need to make sure that the leave settings for this part-time employee's Annual Leave is configured to pay out ADW.

​Head to Leave > Manage Leave Policies > Settings > Annual Leave / Leave Grades (For this employee) and select "Pay ADW" option under Payroll Setting:

3) Processing Any Current ADW Leave Payment/Deduction in Payroll

This is the final step - calculation of the ADW for a current payroll for your part-time employee.

When you proceed to process payroll, you can now include an itemised leave payment/deduction which will use the data from the steps above to calculate ADW accurately for a part-timer being paid an hourly wage.

​The ADW calculated is the rate of pay reflected in the system. This is the formula used:

  • Total Wage (for the relevant period) / Number of Days (same relevant period)

And that is how you get accurate calculations for these type of scenarios 😃

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