What is "Pro Rata" and How Does it Work?

What "Pro Rata" Means and How To Calculate It | Job Advice

Most of us have heard the term "pro rata", generally when applying for a new job. The salary may be advertised as being pro rata, so it’s a pretty important aspect of the job. But if you’re unsure what pro rata pay is, the salary offered could be misleading. So what does the phrase actually mean?

What is Pro Rata?

The term "pro rata" comes from the Latin word for ‘proportional’. It’s about distributing something evenly, depending on the share held of the overall object or concept. So, put simply, a pro rata wage is calculated from what you would have earned if you were working full time. Your pay would be proportional to the wage of someone working more hours.

For example, you’re working 25 hours a week on a pro rata basis. One of your colleagues is working full time, on a 40 hour contract. Both your jobs are advertised as paying £30,000 per annum, but yours is calculated pro rata. So your colleague is earning the full £30,000 per year, whereas you’re getting a proportion of that, based on your fewer hours worked. Your annual salary would therefore be £18,750.

How Do You Calculate Pro Rata Wages?

The simplest way to work out how much you’d be paid on a pro rata basis is dividing the annual salary by the number of full time hours, and then times this number by the pro rata hours. So for the example above, this would look as follows:

£30,000 (annual salary) ÷ 40 (full time hours) = 750 

750 x 25 (pro rata hours) = £18,750

The only problem with this method is that it’s not always completely accurate. It’s a good way to work out roughly what you’d be earning when you apply for a pro rata job, but if you want to know the specifics, you’d need to consider the pay as a wage, rather than a salary. In other words, figure it out using the hourly rate rather than as a percentage of a full time salary. 

For instance, if the full time wage is £26,000 per annum, and this is for 40 hours a week, you can calculate the hourly rate of pay using the below formula:

£26,000 (annual salary) ÷ 52 (weeks in a year) = £500 (weekly wage)

£500 (weekly wage) ÷ 40 (full time hours) = £12.50 (hourly pay)

Pro Rata Holiday Entitlement

The statutory minimum holiday time is 5.6 days, and for a full time employee, who works five days a week, this would be 28 days. So it’s fairly simple to calculate pro rata holiday entitlement - you just multiply how many days you work per week by 5.6.

If you work three days a week rather than five, for example, your holiday entitlement can be calculated as below:

3 (weekly days working) x 5.6 (statutory holiday) = 16.8 (holiday days)

Obviously taking 0.8 of a holiday day would be odd, and could be tricky to calculate, so generally your employer would round this up, and you’d have a total of 17 holiday days a year.

It can get more complicated to work out your holiday entitlement if you don’t start working for your new employer until mid-year, but you can estimate roughly how much time you’d have off if you know how many months of the working year you have left. And if in doubt, you can simply  ask your employer for your holiday entitlement when you start.

Other Things to Consider

It’s also important to keep in mind that regardless of whether you’re working full time or on a pro rata basis, you’re entitled to the same benefits. Government legislation states that those working part time should receive the same perks as those working full time, in terms of both financial benefits and other perks.

So if your employer is offering a private pension or a bonus scheme to full time employees, they have to give you the same opportunities even if you’re working less hours. The same applies to perks such as subsidised parking and having your birthday off as annual leave.