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  • Writer's pictureLili

HR tips: How much is the pay for AL? How wage should be counted per day? What is ADW?

Updated: Aug 25, 2023

Either travelling or being sick, it is common for employees to ask for leave. In the case of annual leave, while it makes sense that the leave is with pay, do you know that the amount should not be counted as simple as wage for one day?

From the HR perspective, there is a term called "ADW", which is the 12-month average salary that used as an indicator for calculating paid leave or final payment, etc. At the end of the year, in addition to the basic salary, many employees also have commissions and year-end bonuses. In other words, the total amount that a labor can earn in a year may not be simply multiplying the monthly salary by 12 months.

To illustrate with an example:

The basic salary of salesperson A is $20,000; Her average monthly commission for the year is $13,000. In this case, what is the amount she can get for her one-day annual leave?

If her contract has been effective for 1 year or more, one day AL = (20000+13000)*12/365, which is $1,084.931

Usually, the company's calculation will simply divide the basic salary by day, which is $666.67/day -- a difference of more than 60%! Such a huge loss...!

At the same time, whether you have taken annual leave before and the time you take the annual leave will also affect the amount!

Feeling confused by the numbers? Our professional HR consultants are always here to help!

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