Calculate Prorata in payrun

Updated July 2, 2024 2 min read Reviewed by The Payroll Success Team at Humanised

On this page
  1. Overview
  2. Employee joins or leaves in the middle of the salary cycle
  3. Employee was absent for a large portion of the pay cycle
  4. What's next?:



This article is for owners and admins who use Humanised

Overview

There are several instances when you must prorate the monthly salary to the number of days an employee has worked.

  • When an employee joins or leaves in the middle of the salary cycle

  • When an employee was absent for a large portion of the pay cycle

Here’s how to prorate salaries in these scenarios

Employee joins or leaves in the middle of the salary cycle

  • Step 1 – Update the joined date and resigned date as soon as you get to know them

If you update them as early as possible, there is little chance for you to forget when the relevant pay cycle rolls around.

  • Step 2 – Switch on pro rated salaries and and pay categories you want to prorate (basic salary, fixed allowances and variable allowances)

  • Step 3 – Verify that no.of days per month is updated

  • Step 4 – System calculates pro-rated salaries.

Humanised keeps track of joined dates and resigned dates of all employees for a number of different reasons including pro rata calculations. When you create a payrun for a certain pay cycle (month) Humanised will look for any employees who have joined or left in the middle of the pay cycle.

Depending on whether you consider the number of days in the calendar month, a fixed number of days or variable number of days, it will calculate the number of days the employee has worked and prorate the salary accordingly.

However, we realize that prorated salaries are not that straightforward. For this reason, you can further adjust your no.of days worked for the month. This will recalculate the pay categories you have selected in company settings in real time.

Employee was absent for a large portion of the pay cycle

  • Step 1 – Switch on pro rated salaries and and pay categories you want to prorate (basic salary, fixed allowances and variable allowances)

  • Step 2 – Edit the no.of days worked for the month to pro rate salaries.

When you switch on pro rata for an organization, you will get the option of editing the no.of days worked on each employee. Update the no.of days worked for relevant employees to pro rate their salaries

What’s next?:

Payrolls pegged to a foreign currency with base salaries in LKR

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