Retro pay calculator for raises paid late

When retro pay comes up

Retro pay is the difference between what someone was paid and what they should have been paid for work already done. In trade crews it usually follows a raise agreed after its start date, a new rate entered late, or a rate entered wrong. The hours were paid, just at the old rate.

How HiVis keeps a late raise from becoming retro pay

In HiVis payroll, every hourly rate has an effective date. If you record a raise late but with its real start date, hours already entered from that date are priced at the new rate in the live payroll calculation, so nobody has to work out the difference by hand.

Closed pay periods don’t change. If a raise starts inside a period you’ve already closed, add the difference as a correction in a later open period; for hourly staff, this calculator gives you the amount. HiVis doesn’t handle salaried pay, so salaried staff stay outside it.

How it’s calculated

• Hourly: retro pay = (new rate − old rate) × hours paid at the old rate. The calculator covers regular hours: for hours paid as overtime, multiply the difference by your overtime rate as well, 1.5 under the FLSA (29 CFR 778.303).
• Salary: for each month in the period, retro pay = monthly difference × days covered in that month ÷ days in that month. A yearly salary is divided by 12 first, and the months are added up.

This is calendar-day proration. Some payroll systems prorate by working days instead, which can give a different amount, so use the method your payroll already uses.

Worked example

The calculator’s starting values, which are example numbers: an hourly worker was paid the old $25 rate for 160 hours after a raise to $27 took effect.