When a new employee joins the company mid-month or on the 20th of the month, their first salary should be pro-rated based on the actual number of days worked during that month. Same for leavers: when leaving mid-month the salary for the last month needs to be pro-rated based on the actual number of days worked during that month.
Option A - based on calendar days: Pro-Rated Salary = (Monthly Salary / Total Calendar Days) × Days Worked
Option B - based on worked days: Pro-Rated Salary = (Monthly Salary / Total Working Days) × Working Days Worked
The choice depends on company policy (calendar vs. working day calculation).
Examples
Example 1: Start on 15th April
→ Salary = €3,000 / 30 × 16 = €1,600
Example 2: Start on 20th June
→ Salary = €3,000 / 30 × 11 = €1,100
System Behavior Suggestion
In the payroll or HR planning solution:
Automatically detect mid-month hires.
Apply pro-rata formula based on start date (and leave date).
Allow configuration: calendar vs. working day base.
Add day-level granularity to the dropdowns from 'Start Month' to 'Date of Joining' under the Add Employee Master Data section.