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    Employment Benefits Compensation Advising Forms Policies

    Hours in a Fiscal Year and the Effect on Hourly and Annual Pay Rates

    The number of hours in the fiscal year at the University of Arizona may change each July 1, based on the number of regular work days occurring between July 1 and June 30 each fiscal year. Since the pay rates that generate paychecks are based on an hourly equivalent, including annual salary rates, the number of work hours in a fiscal year may impact an employee's biweekly gross earnings. The number of hours in a fiscal year defines the standard used to make conversions to and from wage (i.e., hourly) pay rates and salary (i.e., annual) pay rates.

    Hourly wage employees are paid according to their hourly rate; the rates for these employees are not affected by the change each July 1. Employees paid an annual salary, which is converted to an hourly rate at time of payment, are affected by the change each July 1. For a given annual salary, the hourly rate decreases in years with more fiscal year hours, and the hourly rate increases in years with fewer fiscal year hours; in all cases, the total amount of gross earnings for the fiscal year remains the same.

    Below is an example of the effect of the change in fiscal year hours on the paycheck for an employee in a grade 22 position. (If the employee is in a wage position, s/he must be paid no less than $10.156 per hour; if the employee is in an annual salary position, s/he must be paid no less than $21,124 annually.)

    Wage Position Calculation:
    Hourly Pay Rate x Hours Worked = Biweekly Gross Pay
    Regular Work Hours in Year Wage Position Pay Rate Pay Period Hours Worked Regular Biweekly Gross Earnings
    2080 $10.156 80 $812.48
    2088 $10.156 80 $812.48
    2096 $10.156 80 $812.48
    Annual Salary Position Calculations:
    Annual Pay ÷ Hours in Year = Converted Hourly Rate
    Converted Hourly Rate x Hours Worked = Biweekly Gross Pay
    Annual Pay ÷ Number of Pay Periods = Biweekly Gross Pay
    Regular Work Hours in Year Annual Salary Rate Annual Salary Converted to Hourly Rate Pay Period Hours Worked Regular Biweekly Gross Earnings
    2080 $21,124 $10.15577 80 $812.46
    2088 $21,124 $10.11686 80 $809.35
    2096 $21,124 $10.07824 80 $806.26
    Definitions
    Wage: The hourly rate of pay associated with a position.
    Annual Salary: The annual rate of pay in the fiscal year associated with a position.
    Fiscal Year Bridge Pay Cycle: When the end of one fiscal year is in the same biweekly pay cycle as the beginning of the next fiscal year, the earnings for the last few days of the first year are paid on the first pay date of the next fiscal year.
    The Classified Staff Alphabetical list and the Classified Staff Pay Schedule: These tools always use 2080 hours for the conversion standard.

    More information is available on the Systems Control website.