I have a contract for a new job here and its monthly rate doesn't add up to what I expect.

I was offered $1000* per week in the interview process. The contract rate uses a monthly basis however, by my calculations I should receive:

  • Using weeks as the smallest timeframe > (1000 * 52) / 12 = $4333 per month or:

  • Using days as the smallest timeframe > ((1000 / 7) * 365) / 12 = $4345 per month

As the rate was offered in weeks, I expected $4333.

They offered $4000 per month.

At the time they didn't explain their calculations so I assumed it was an exchange rate issue (that I wont muddy the water with, but please trust me that it's unrelated to the matter at hand), however following discussions indicate we were indeed using the correct exchange rate, but they were calculating the monthly rate using the value of '4' for the number of weeks in a month. i.e. simply:

  • 1000 * 4 = $4000

Question: Is this a standard accounting rule of thumb, or otherwise expected and ok?

Currently they're telling me I'm using the incorrect exchange rate, and the whole 4 weeks in a month seems very natural to them. I believe I can clear this up in the next email iteration, but I don't want to stuff up rate negotiations, and therefore I have to try on for size that I'm the one at issue.

Am I?

It is a US based company working out of Asia.

* not the real amount, but set at 1000 to make the ratios clearer

  • 2
    Just tell them that there are 50 minutes in an hour - and get them to use that in the calculation. – Ed Heal Apr 30 at 21:23
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    It may be that you're being paid every 4 weeks, and not every month. This will mean 13 payments a year, instead of 12. But you'll need to check that with HR. – HorusKol Apr 30 at 21:37
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    @HorusKol - my thinking too. Same as when our company moved from paying us twice each calendar month, to once very two weeks. So number of paydays went from 24 to 26. – Laconic Droid Apr 30 at 21:41
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    @LamarLatrell Some countries/companies have a 'thirteenth salary', paying twice in December. en.wikipedia.org/wiki/Thirteenth_salary – Lag May 1 at 7:55
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    In my previous contract i was paid every four weeks but in all contracts they used the (tanslated) term "payment period" to differentiate from a calendar month. – Borgh May 2 at 7:11

Question: Is this a standard accounting rule of thumb, or otherwise expected and ok?

It's not at all standard in my experience.

But it doesn't matter. You were expecting an offer of $4333 and (if your understanding is correct) only got $4000. So it's simply a matter of an offer coming in lower than you expected/want. Deal with it that way.

If you conclude that you aren't willing to settle for $4000/month, then simply negotiate for more. Skip the accounting argument. Just ask for more per month.

  • Am I correct in that you're simply assuming bad faith here? Reality is that it's still a high paying job that I've decided I 'can't afford' to turn down even at the lower rate - so they've got me. Assuming good faith however, I'm just hoping to appeal to sense. Alternatively, as HorusKol points out in comments, I may actually be paid every 4 weeks, and effectively have 13 months a year, so I'm good to go. (yet either way, they're doing something not quite right, 13 month years??). I await a reply from them.. – Lamar Latrell May 1 at 0:42

I was offered $1000* per week in the interview process. The contract rate uses a monthly basis however.

I assume you mean that the contract specified you would be paid monthly? Because if the "rate used a monthly basis", you wouldn't have been offered a "per week" but a "per month".

While not a universal thing - some companies run their accounts on what is known as the 52-53 week calendar (or 4-4-5 calendar) - where the year is divided into 4 quarters of three months. The first two months are exactly 4 weeks (28 days) long, and the third is 5 weeks (35 days) long. The system is used so that each month, and each financial year, starts on the same day (it does mean that each financial year starts a day earlier - but this is fixed by having a 53-week year every so often).

I'd go to HR or finance, or your supervisor, and politely say to them that there seems to be a discrepancy between your pay and what you were expecting. Ask them what accounting calendar they are using, and ask if you can have a schedule for future payments.

  • The contract states 'monthly', yet in the interview I was given a weekly rate, that's the issue. I have contacted them, yet to receive a reply. Despite it saying 'monthly' I am hoping that some form of a 13 month year as you suggest will be the outcome. – Lamar Latrell May 1 at 7:16
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    +1 simply for the "Politely". It would suck to go on the offensive about this only to find there was an actual legit reason or a miscommunication or such. Sure, the company could be trying to reduce his pay by 8%... but it's better to verify the situation first. – Kevin May 1 at 20:46

If the offered $1000 per week then that works out as $52,000 per year, and that’s what their offer should be. They can then pay you $1,000 every week, or $4,000 every four weeks, or $4,333 every month.

  • Yes, and it would appear that they call the 'every four weeks' option 'monthly', which is hopefully the root cause of the discrepancy. Yet to hear back regarding this though as the person who can give the ultimate confirmation is away. Please note that there are actually 52.1429 weeks in a year (hence my other calculation), it's not as simple as people assume. – Lamar Latrell May 2 at 10:17

the whole 4 weeks in a month seems very natural to them

Just ask them if that means you also have to work only 4 weeks per month to get that monthly salary. Should clear up that question real quick.

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    This is pretty bad advice. There's the decent possibility that this is due to a misunderstanding or accounting issue (such as getting paid every two weeks vs paid twice-a-month, which would work out differently in terms of payment amounts). Going in with sarcasm guns blazing is terrible if you don't know for sure the company's actually doing something wrong. – Kevin May 1 at 20:34
  • I agree with @Kevin, the point of my question was part due to me trying to avoid the instinct to do something like this. However, that if it turns out that they also pay every 4 weeks (and have 13 month years), I'm going to have trouble trying to stifle sarcasm regarding that as well! – Lamar Latrell May 1 at 22:38

Generally a month is rounded to 4.3 weeks so yes they are undercutting you.

  • 2
    Some employers use a lunar calendar (4 weeks * 13 months = 52 weeks). I've not come across it myself but it exists. – P. Hopkinson May 1 at 19:39
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    I've been paid twice-a-month at one company I worked at, and once-every-2-weeks at another. Doesn't even have to be a lunar calendar for this to happen legitimately. Leaping straight to "Yup, being undercut" is a bit drastic. – Kevin May 1 at 20:36
  • @Hopkinson That’s not exactly lunar. – gnasher729 May 2 at 10:07

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