Prorate Salary Calculation

 

 

This article explains how Personio automatically calculates prorated fixed salaries if an employee joins or leaves the company in the middle of a month.

This type of calculation also applies to mid-month salary adjustments and scheduled leave periods. To define the basis on which prorated salaries should be calculated in Personio according to your company’s internal regulations, go to Settings > Payroll > Salary & Payroll. Under General > Payroll, define the point Prorate salary calculation and set the basis on which prorated salaries should be calculated. Personio provides two options for doing this: prorate calculations based on a 30-day period or based on the actual number of days in the month.

settings-payroll-prorated_en-us.png

Example

The following example illustrates the two different approaches to prorate salary calculations based on a salary increase which is to take effect on the 15th of the month. It clarifies the effect the different calculation approaches will have on the salary paid, depending on the method used:

 

Prorate Salary Calculation – 30 days/month

Prorate Salary Calculation  – all days of the month

Salary to increase on

15th January (31 days)

14/30 * 1900 = €886.67

17/30 * 2800 = €1586,67

Total = €2473.33

14/31 * 1900 = €858.06

17/31 * 2800 = €1535.48

Total = €2393.54

Salary to increase on

15th February (28 days)

14/30 * 1900 = €886.67

14/30 * 2800 = €1306.67

Total = €2193.34

14/28 * 1900 = €950.00

14/28 * 2800 = €1400.00

Total = €2350.00

Salary to increase on

15th April (30 days)

14/30 * 1900 = €886.67

16/30 * 2800 = €1493.33

Total = €2380.00

14/30 * 1900 = €886.67

16/30 * 2800 = €1493.33

Total = €2380.00

Note It is always the actual number of days of the month which are considered in the numerator, regardless of the chosen calculation approach.

 

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