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In this article, you will learn how prorated salary calculation works in Personio Payroll.
General information on the prorated salary calculation in Personio Payroll
The prorated salary calculation is applied to the base salary and the predefined recurring salary if the following cases occur during the payroll period:
- Entry after the first day or exit before the last day of the month
- Changes in remuneration (increase/decrease)
- Change of salary type (hourly salary/fixed salary)
- Unpaid leave and team calendar
Depending on the calculation method, the prorated salaries may vary. Personio already offers two calculation methods, which are supplemented by another method in Personio Payroll. You can choose between the following calculation methods:
- Based on 30 days
- Based on the number of calendar days
- Based on the number of actual working days
You can use the pro-rata salary calculation method annually at the turn of the year, i.e. 01.01.XXXX. Here's how to set this up in Personio Payroll and how the different methods work.
Overview of prorated salary calculation methods in Personio Payroll
The following example illustrates the three different approaches to pro-rata salary calculation using a salary increase that 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:
| Based on 30 days | Based on the days of the month | Based on actual working days | |
| Formula | Number of days with old compensation per month/30 days * Total of old compensation + Number of days with new salary/30 * new salary = pro-rated salary | Number of days with old salary per month/days in the month * Sum of the old salary + Number of days with new salary/days in the month * Total of the new salary = pro-rated salary | Number of actual working days at the old salary/full monthly working days * old salary AND Number of actual working days at the new salary/full monthly working days * new salary = pro-rated salary |
Salary to increase on 15 January 2025 (31 days a month/ 23 working days) | 14/30 * 1.900 = 886,67 € 17/30 * 2.800 = 1586,67 € Total = 2473.33 € | 14/31 * 1.900 = 858,06 € 17/31 * 2.800 = 1535,48 € Total = €2393.54 | 10/23 * 1900 = 826.09 € 13/23 * 2800 = 1582.61 € Total = 2408.70 € |
Salary to increase on 15 February 2025 (28 days a month/ 20 working days) | 14/30 * 1.900 = 886,67 € 14/30 * 2.800 = 1306,67 € Total = 2193.34 € | 14/28 * 1.900 = 950,00 € 14/28 * 2.800 = 1.400,00 € Total = 2350.00 € | 10/20 * 1.900 = 950 € 10/20 * 2.800 = 1.400 € Total = 2.350 € |
Salary to increase on 15. April 2025 (30 days a month/22 working days) | 14/30 * 1.900 = 886,67 € 16/30 * 2.800 = 1493,33 € Total = €2380.00 | 14/30 * 1.900 = 886,67 € 16/30 * 2.800 = 1493,33 € Total = €2380.00 | 10/22 * 1900 = 863.34 € 12/22 * 2800 = 1542.27 € Total = 2390.91 € |
Notes:
- All methods closer holidays from the calculation.
- To record the payment of the pro rata salary in the time off balance, you can also enter the difference as a (negative or positive) one-time compensation.
Define and change the method for calculating pro rata salary
In Personio Payroll, the method for calculating salaries on a pro rata basis is linked to the permanent establishment. You must therefore set up the method separately for each permanent establishment and, if necessary, change it separately.
To do so, perform the following steps:
- Navigate to payroll > payrolland open the tab Administer.
- Click Pro-rata salary calculation.
- Select the prorated salary calculation method.
- If necessary, select a date of entry into force (always 01.01. of a year) and save your data.
Please note:
If you backdate a change in the prorated salary calculation method, the prorated salaries will be recalculated retroactively.