Prorated Salary Calculator

Background.

Joining a company on the 19th, leaving partway through a month or taking a stretch of unpaid leave all raise the same payroll question: how much of a salary is owed for part of a period? Proration answers it by turning the salary into a daily rate and paying only the days that count. The arithmetic takes one line. The arguments are about which days count.

The divisor does most of the work. Some employers divide a monthly salary by the calendar days in that particular month, so a day in February is worth more than a day in March. Others use the working days in the month, others a flat 30-day month, and annual-salary policies often divide by 365 or by 260 working days. On a 6,000 monthly salary, one day is worth 214.29 in a 28-day month and 193.55 in a 31-day month. Over a part month that difference adds up to real money.

The days you count on top must follow the same rule as the divisor. Twelve calendar days divided by 22 working days gives 3,272.73 on that same 6,000 salary, far more than the 2,400 that twelve calendar days out of thirty produce. Mixing the conventions is the most common way a prorated figure goes wrong.

The result is gross pay, before income tax, social contributions or benefit deductions. Which convention applies, whether paid holidays count and how the final figure is rounded are set by the employment contract, the employer's payroll policy and local law. In the United States, the federal salary-basis rule for exempt employees limits when a salary may be paid in part at all.

What is prorated salary calculator?

A prorated salary is the share of a full-period gross salary paid for only part of that period. The full salary is divided by the number of days in the period to give a daily rate, and the daily rate is multiplied by the number of days the employee is entitled to be paid for. Both day counts must use the same convention, whether that is calendar days, working days or a fixed 30-day month.

How to use this calculator.

1. 01Enter the gross salary for the whole period being split: the monthly salary for a part month, the weekly salary for a part week, or the annual salary for a part year.
2. 02Enter the days in the proration period under the convention your contract or payroll policy uses, such as 31 calendar days, 22 working days or a fixed 30.
3. 03Enter the eligible days counted the same way. If the divisor is working days, count only the working days the employee was employed or on paid leave.
4. 04Keep eligible days no larger than the period's days; the formula does not cap them and would otherwise return more than the full salary.
5. 05Read the result as gross pay. Tax, contributions and deductions are worked out on it afterwards by payroll.

The formula.

Prorated pay = S × e ÷ d, where S is the gross salary for the full period, e the number of eligible days and d the number of days in the period. S ÷ d is the daily rate; multiplying by e pays for the days that count. The result is proportional to the salary and to the eligible days, and inversely proportional to the period length, so the choice of d matters most: on the same salary and the same twelve days, a 28-day divisor pays about 10.7% more than a 31-day one. There are no built-in constants or calendars. Every day count comes from you, so the page works equally for weeks, months and years, provided e and d are counted on the same basis.

A worked example.

Frequently asked questions.

References& sources.

1. [1]U.S. Department of Labor, Fact Sheet #17G, Salary Basis Requirement.
2. [2]29 CFR 541.602, Salary basis.
3. [3]BIPM, The International System of Units (SI Brochure), 9th ed., version 3.01, coherent derived units and quantity equations.