When calculating Payroll, companies follow one of two main systems:
Fixed monthly system (30 days per month) – Payroll is calculated based on each month having 30 days, regardless of the actual number of days.
Calendar system (based on actual days per month) – Payroll is calculated based on the actual number of days in the month (January 31 days, February 28/29 days, etc.).
In this article, we will review the differences between the two systems, with practical examples:
a) Basic Payroll cases
| Transaction Type | Fixed 30-day | Calendar |
|
New Employee Salary/Employee Salary |
(Salary ÷ 30) × Working days |
(Salary ÷ Days of the month) × Working days |
| Unpaid Leave | (Salary ÷ 30) × Vacation days | (Salary ÷ Days of the month) × Vacation days |
| Absence | Deduction (Salary ÷ 30) × Absence days | Deduct (salary ÷ days of the month) × days of absence |
| Overtime | (Salary ÷ 30) × Overtime | (Salary ÷ Days of the month) × Overtime hours |
| Violation Deduction (whether days or a percentage of a day) |
hours (Salary ÷ 30) × Days (Deduction due to violation) (Salary ÷ 30) × Deduction percentage from the day (Deduction due to violation) |
(Salary ÷ Days per month) × Days (deducted due to violation) (Salary ÷ Days per month) × Percentage of deduction from the day (deducted due to violation) |
Practical example of partial paid leave between January and February
Scenario:
An employee takes paid leave starting on January 25 and ending on February 15 (total of 21 days).
1. Calculating a fixed month (30 days):
Principle: Each month is considered 30 days regardless of the actual number of days.
Calculating daily wage:
Monthly salary ÷ 30
Example: If the salary is 3,000 riyals → Daily wage = 3,000 ÷ 30 = 100 riyals/day.
Calculating leave:
January: From January 25 to 30 → 6 days (until the end of the hypothetical month).
February: From February 1 to 15 → 15 days.
Total: 6 + 15 = 21 days.
Amount due: 21 x 100 = 2,100 riyals.
2. Calculating based on calendar month (based on actual days):
Basic: The actual number of days in the month (January 31 days, February 28 days).
Calculating the daily wage:
Monthly salary ÷ Actual number of days in the month.
Example:
January: 3,000 ÷ 31 = 96.77 SAR/day.
February: 3,000 ÷ 28 = 107.14 SAR/day.
Calculating vacation:
January: From January 25 to 31 → 7 days → 7 x 96.77 = 677.39 SAR.
February: From February 1 to 15 → 15 days → 15 x 107.14 = 1607.10 SAR.
Total: 677.39 + 1607.10 = 2284.49 SAR.
b) Special Cases (Retrospective Settlements)
Based on Table 2, some cases require different treatment depending on the system:
|
Status |
Fixed 30-day calculation |
calendar calculation |
| New Employee Salary Settlement | (Salary ÷ 30) × Actual days | (Salary ÷ Days of the month) × Actual days |
| Unpaid Vacation Deduction | The same amount is deducted for each day+ | The discount is adjusted according to the actual days of the month. |
1) Practical Example of Unpaid Leave Deduction
Scenario:
An employee takes unpaid leave from January 15 to January 20 (6 days).
1. Calculating the fixed month (30 days):
Daily wage: SAR 100 (example).
Deduction: 6 x 100 = SAR 600.
2. Calculating the variable month (January 31 days):
Daily wage: SAR 96.77.
Deduction: 6 x 96.77 = SAR 580.62.
2) Practical Example of Unpaid Leave with Early Resumption of Work
Scenario:
An employee's monthly salary is SAR 6,000.
Takes unpaid leave from January 28 to February 5 (9 days).
He returned to work on February 2 (i.e., he resumed work before the end of the planned leave).
Salary calculation method in the career (based on the actual number of days in the month).
Calculation Method:
First: Determine the daily wage for each month.
6,000 ÷ 28 = 214.29 riyals/day
Month |
Number of days |
Daily wage |
|---|---|---|
January |
31 days |
6,000 ÷ 31 = 193.55 riyals/day |
February |
28 days |
6,000 ÷ 28 = 214.29 riyals/day |
Second: Calculating the discount days
- Original vacation period: January 28 - February 5 (9 days).
Third: Discount value
| Date | Days | Daily wage | Deduction |
|---|---|---|---|
| 28 jan – 31 jan | 4 days | 193.55 riyals | 4 × 193.55 = 774.20 riyals |
| 1 feb - 5 feb | 5 days | 214.29 riyals | 5 × 214.29 = 1,071.45 riyals |
| Total | 9 days | 1,845.65 riyals |
The employee will resume work starting February 2.
The actual period of leave that will be deducted from the employee: January 28 - January 31 (4 days in January) + February 1 (1 day in February).
Fourth: The amount that will be refunded to the employee's salary as a result of resuming work.
| Date | Days | Daily Wage | Total refund amount |
| from 2 feb to 5 feb | 4 days | 214.29 riyals | 214.29 × 4= 857.16 riyals. |
3) If there is no previous payroll data (for example, a period was skipped in the payroll, or the employee's salary was suspended)
Scenario:
A new employee who was not included in previous payrolls.
Takes unpaid leave from February 10–15 (6 days).
Calculation:
The current salary is used (no previous reference).
February daily salary: SAR 214.29.
Deduction: 6 x 214.29 = SAR 1285.74.
Other cases:
- If an employee has one day of absence in April and after the month closes and a leave request is submitted, the deduction value is converted to leave, and the same absence deduction value will be recovered based on the calculation method (30 fixed days or based on the days of the month) for the current period of the payroll, even if the calculation method has changed.
- If the employee was not present in the payroll last month, and deductions were calculated for him retroactively (attendance and departure / overtime / unpaid leave...etc.), then in this case the calculation is based on the calculation method specific to the current payroll.
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