Prorated Payroll Calculation

In payroll management, organizations face significant challenges in determining the optimal method for calculating payroll, especially when it comes to employees joining or leaving mid-month, or when calculating deductions and vacations. One common dispute in this area is choosing the method for calculating payroll: should it be based on a fixed month (30 days) or based on the actual calendar (28/29/30/31 days) per month?

Organizational requirements vary depending on local laws and the nature of the industry, making it essential to have a flexible payroll calculation option in the Jisr system that the user can choose to calculate payroll based on actual days or a 30-day month.

Providing the option to calculate payroll based on actual days or a 30-day month gives organizations the flexibility and accuracy they need, reducing errors and improving legal compliance. By implementing this feature, payroll systems can become more efficient and meet the needs of a diverse customer base.

Note 1: Old transactions recorded in the system will remain as they were (30-day month).

Note 2: Each payroll can have its own calculation method. For example, payroll "X" can be calculated based on a fixed month (30 days), while payroll "Y" can be calculated based on the actual calendar.

How to choose a calculation method in the payroll

1. Click Settings, then "Salary Group Settings."

2. Select the payroll for which you want to choose a calculation method, then click "Settings."

3. In the Data tab, the "Salary Calculation Method" tab will appear.

4- The user can select the appropriate method for this process:

Based on the actual days of the month (the salary is divided by the actual number of days in the month (28, 29, 30, or 31 days)

A fixed 30-day calculation (the salary is always divided by 30 days, regardless of the actual number of days in the month)

Transactions that will be affected by the calculation method selection:

New joiners salary

Leavers (Final settlement)

Vacation salary

Unpaid leave

Attendance Deductions

Overtime

Sick Leave

Practical example of applying the feature:

Let's assume a company has an employee with a monthly salary of 3,000 riyals, and he joined the company on January 21st.

Method 1: Calculation based on a fixed month (30 days)

Daily wage = Monthly salary ÷ 30

3,000 ÷ 30 = 100 riyals/day

Due salary = Number of working days × Daily wage

10 days × 100 riyals = 1,000 riyals

Method 2: Calculation based on actual days in the month (January: 31 days)

Daily wage = Monthly salary ÷ Actual number of days in the month

3,000 ÷ 31 ≈ 96.77 riyals/day

Due salary = Number of working days × Daily wage

11 days × 96.77 ≈ 1,064.52 riyals