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How to calculate time off liability

To calculate liability for Time Off, you can use the following formula:

Liability = someone's current Time Off balance in hours x their hourly pay rate

When calculating liability for salaried workers, first calculate the hourly pay rate for them using the formula below:

Hourly pay rate = annual salary (in dollars) divided by 2080 hours per year

Liability calculation example

  • A salaried employee has a current Time Off balance of 80 hours
     
  • The employee earns $52,000 a year.
  • The employee's hourly pay rate thus comes out to $25 an hour ($52,000 / 2080 hours).
  • The employee's current liability is $ 2 ,000 (80 hours x $25 an hour).
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