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 

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).

Related FAQ

            How do I prorate components as per the Basic Pay when an employee is terminated or suspended?

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