How does the system prorate an employees' salary?
This feature is available on all PaySpace editions
The system prorates the Basic Pay based on an employee's employment, termination or suspension dates. The proration calculation can be configured using the following calculation settings.
Navigate > Config > Payroll > Payroll Config > Calculation Settings > Proration
Important Comment
Previously, the proration settings on the Calculation Settings screen used various checkboxes, where a combination of checkboxes resulted in a different proration method. These checkboxes have been replaced with a selection list representing each proration method to make it easier for users to choose and distinguish between the different proration calculation methods available on the system.
This update does not impact existing calculations as calculations will continue to function as they did before.
Do not prorate
Calculation 1
Example - Employee terminated on 15 October 2024.
Pay Rate: 20 000.00
Working Days: Monday to Friday [5 days
Calculation breakdown
Part 1 = 20 000 [Package] / 31 (full month - Oct) = 645.16
Part 2 = 645.16 X 15 [Employee days worked, incl. Weekends] = 9 677.42
Calculation 2
Example - Employee terminated on 15 October 2024.
Pay Rate: 20 000.00
Working Days: Monday to Friday
Prorate by this many days: 24
Calculation breakdown
Part 1 = 20 000 [Package] / 24 = 833.33
Part 2 = 833.33 X 15 [Employee days worked, incl. Weekends] = 12 500.00
Calculation 3
Example - Employee terminated on 15 October 2024.
Pay Rate: 20 000.00
Working Days: Monday to Friday
Actual Working Days per Period [1 to 31 October 2024 - excl. Weekends]: 23
Calculation breakdown
Part 1 = 20 000 [Package] / 23 = 869.56
Part 2 = 869.56 X 11 [Employee days worked] = 9565.22
Calculation 4
Example - Employee terminated on 15 October 2024.
Pay Rate: 20 000.00
Working Days: Monday to Friday
Days per Period: 21.67
Calculation breakdown
Part 1 = 20,000 [Package] / 21.67 = 922. 93
Part 2 = 922.93 X 11 [Employee days worked] = 10 152.28
Important Comment
If any of the above proration settings are changed, it will affect all employees' Basic Pay component calculations for the current open period (i.e. newly onboarded, terminated, or suspended).
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