The short answer to this question is - it's complicated. The long answer depends on whether there are more than a years worth of Payroll Statistics records in the system. - If the Client has more than a years worth of wages in the Payroll Statistics table, the Annualized wages are simply the sum of the Gross Payroll amounts from Payroll Statistics.
- However, if the client has less than a year in Statistics, then annualized gross pay is calculated like this:
- AnnualGrossPayroll = (360.00/DATEDIFF(d,FirstStatStart,MostRecentStatEnd))* ISNULL(PeriodGrossPayroll,0)
- Roughly translated Annual gross pay = (360.0/ number of days between the first pay period start and most recent period end) * SUM(Gross payroll on statistics)
- 360/difference gives you what percentage daily of the year for which payroll has been submitted.
- Multiplying this by the sum of the actual wages gives an estimated total of what wages should be at the end of the year.
- The 30/360 method is a commonly accepted practice used in calculations that divide the year into periods, such as mortgage amortization schedules because it rounds more cleanly.
- It works as well as 365 when estimating possible payroll and leaves less chance for trailing decimals
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