Disclaimer: The content of this article pertains to the altHR payroll module (not PayrollPanda). As of this date, the altHR payroll module has been discontinued as we form a new partnership with PayrollPanda to bring forth enhanced payroll solutions for our users.
What is an Incomplete Month Salary Pro-Ration?
An incomplete month means when an employee has not worked for a full month in the pay period, this situation usually appears in new hires or resignees that joined or left in between the pay period. In this case, if an employee has not worked a full month in the pay period, the monthly salary will not be paid in full - and it will be pro-rated on the first month (new hires) or the last month (resigned employee).
How does the Pro-ration Calculation work in altHR?
Currently, altHR follows the formula from JTK & Employment Act:
(Basic Salary / Number of days in the month) * Number of days eligible in the month
* Number of days in the month:
Number of days in the month including weekends, non-working days and Public Holidays (eg. November 2022 has 30 days, December 2022 has 31 days)
* Number of days eligible in the month:
New hires = Number of days from the start date to the last day of the month
Resigned Employee = Number of days from the 1st day of the month until his/her last day of work
This is including weekends, non-working days and Public Holidays
Scenario
1. You hired Mr.A and he starts work on 15th December 2022 with basic salary of RM3,000;
2. You have an employee, Mr. B resigned on 9th December 2022 and his salary is RM5,000.
For Mr.A's pro-rated salary on Dec 22,
Basic salary = RM3,000
Number of days in the month (Dec 22) = 31 days
Number of days eligible in the month = 15th to 31st = 16 days
(RM3,000/31 days)* 16 days = RM 1,548.39
For Mr.B's pro-rated salary on Dec 22,
Basic salary = RM5,000
Number of days in the month (Dec 22) = 31 days
Number of days eligible in the month = 1st to 9th = 9 days
(RM5,000/31 days)* 9 days = RM1,451.61
Note: If your company has a different formula, please calculate manually and use the edit salary feature if you are not following altHR's calculation >> Read How to edit salary during payroll processing