How Pay Rates are Calculated

Employees may change FLSA Exemption status for various reasons. The sections below explain how an employees hourly rate or salary is calculated. 

If your FLSA exemption status is changing as a result of your UCAP mapping, please refer to the FLSA Overview & Toolkit PowerPoint slides or the FLSA resources on this document for more information. If you have additional questions about UCAP or FLSA changes, submit them here

Rate of Pay Calculations 

For an employee transitioning from salaried to hourly (exempt to non-exempt)

Fiscal Year Calculation =  Annualized Salary/2080 hours in a fiscal year
Academic Year Calculation = Annualized Salary/1600 hours in an academic year

For an employee transitioning from hourly to salaried (non-exempt to exempt)

Fiscal Year Calculation = Hourly Rate * 2080 hours in a fiscal year * FTE
Academic Year Calculation = Hourly Rate * 1600 hours in an academic year * FTE

Examples:

#1: A 1.0 FTE academic year employee is currently paid a salary of $35,000 and is transitioning to hourly (non-exempt). 

Calculation: $35,000 / 1600 hours = Hourly rate of $21.875

#2: A 1.0 FTE fiscal year employee is currently paid $22.00 an hour and is transitioning to exempt

Calculation: $22.00 * 2080 hours * 1.0 FTE = $45,760 annually

How Hours in a Fiscal Year Affect Annual Pay Rates

Employees at the University of Arizona are paid on a fiscal-year basis. The number of hours in a fiscal year may change each July 1, based on the number of regular workdays occurring between July 1 and June 30 of that year. Since the pay rates that generate paychecks are based on an hourly equivalent, the number of work hours in a fiscal year will have a small effect on a salaried employee's biweekly gross earnings. Depending on the number of hours in a fiscal year, the employee's salary may be spread across 26.0, 26.1 or 26.2 pay periods.

Hourly wage employees who are nonexempt under the Fair Labor Standards Act are not affected by the change each July 1 because they are paid a consistent hourly rate for each hour that is worked. 

Any employees whose pay is based on an annual salary are affected by the change each July 1, because the annual salary is converted to an hourly rate at time of payment. For a given annual salary, the hourly rate decreases slightly in years with more fiscal-year hours, and increases in years with fewer fiscal-year hours; in all cases, the total amount of gross earnings for the fiscal year remains the same.

How Hours in a Fiscal Year Affect Your Bi-Weekly Gross Earnings

Annual Pay ÷ Number of Regular Work Hours in Year = Converted Hourly Rate

Converted Hourly Rate x Hours Worked in Pay Period (based on FTE) = Biweekly Gross Pay

Here is an example of how the change in fiscal-year hours would affect the paycheck of an employee with an annual salary of $50,000. This example assumes full-time employment. If you work less than 80 hours per pay period, multiply the number of hours you work by the converted hourly rate. 

Regular Work Hours in Year Annual Salary Rate Annual Salary
Converted to Hourly Rate
Pay Period Hours Worked Regular Biweekly
Gross Earnings
2,080 (26.0 pay periods
in fiscal year)
$50,000 $24.03846 80 $1,923.08
2,088 (26.1 pay periods
in fiscal year) 
$50,000 $23.94636 80 $1,915.71
2,096 (26.2 pay periods
in fiscal year)
$50,000 $23.85496 80 $1,908.40

Definitions

Annual Salary: The annual rate of pay associated with a position.

Exempt: 

Non-Exempt: 

FTE (Full Time Equivalency): 

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.

Classified Staff Alphabetical List and Classified Staff Pay Schedule: These tools always use 2,088 hours for the conversion standard.

For the current annualized fiscal hours and related calculations, see the applicable Calculation Survival Guide posted by Workforce Systems.