Your Guide to Prorated Salary Calculation
Prorating salary is something every HR practitioner will encounter. Employees joining (or leaving) in the middle of pay cycles is very common, or if an employee takes unpaid leave.
Hence, knowing how to prorate salary correctly will save you time and money. Salary proration only applies to salaried employees that are paid every month. Employees paid hourly don’t need their pay to be prorated – instead, only the hours worked are counted.
There are three options for calculating salary proration in Malaysia. Employers are free to choose which formula to use, as there is no single formula specified by law.
Proration by Calendar Days
Salary is prorated by the number of days in the month, e.g. 30 or 31 days. Weekends and public holidays are included.
Proration by Working Days
Salary is prorated according to the number of working days in the month. Weekends are excluded (but not public holidays).
Proration by Regular Days
For the purposes of calculating an employee's ‘regular days’ rate of pay per month, Malaysia uses a standard, fixed 26-day calculation regardless of weekends and public holidays.
Example Calculations
Ann joined Acme Sdn Bhd on 8 January 2022. Her monthly salary is RM5,000. She works normal hours, five days a week.
Calculation by calendar days:
Calculation by working days:
Calculation by regular days:
Prorating Statutory Deductions (EPF, Socso, PCB)
Statutory deductions like EPF, Socso, and PCB are also prorated according to the actual salary paid. Using the above example, if Ann’s salary is prorated using the calendar days method, she will earn RM3870.97. Accordingly, her EPF contribution (at 11% rate) will be RM427.
Prorate Salary Easily with BrioHR
It’s easy to prorate salary for one employee, but what if you have two, three, or more employees coming in (or leaving) at once? And at different pay grades?
BrioHR’s payroll module makes salary calculations easy. BrioHR automates payroll setup for new employees, as well as automatically calculate all salary-related data. All you have to do is check and approve.
With 9 powerful modules, BrioHR’s software covers the entire employee journey from recruitment to onboarding, payroll and claims, to performance and analytics, and more.
This enables business owners and HR teams to truly focus on what matters most – people.
Visit briohr.com and get a free demo now.
Prorating salary is something every HR practitioner will encounter. Employees joining (or leaving) in the middle of pay cycles is very common, or if an employee takes unpaid leave.
Hence, knowing how to prorate salary correctly will save you time and money. Salary proration only applies to salaried employees that are paid every month. Employees paid hourly don’t need their pay to be prorated – instead, only the hours worked are counted.
There are three options for calculating salary proration in Malaysia. Employers are free to choose which formula to use, as there is no single formula specified by law.
Proration by Calendar Days
Salary is prorated by the number of days in the month, e.g. 30 or 31 days. Weekends and public holidays are included.
Proration by Working Days
Salary is prorated according to the number of working days in the month. Weekends and public holidays are excluded.
Proration by Regular Days
For the purposes of calculating an employee’s ‘regular days’ rate of pay per month, Malaysia uses a standard, fixed 26-day calculation regardless of weekends and public holidays.
Example Calculations
Ann joined Acme Sdn Bhd on 8 January 2022. Her monthly salary is RM5,000. She works normal hours, five days a week.
Calculation by calendar days:
Calculation by working days:
Calculation by regular days:
Prorating Statutory Deductions (EPF, Socso, PCB)?
Statutory deductions like EPF, Socso, and PCB are also prorated according to the actual salary paid. Using the above example, if Ann’s salary is prorated using the calendar days method, she will earn RM3870.97. Accordingly, her EPF contribution (at 11% rate) will be RM427.
Prorate Salary Easily with BrioHR
It’s easy to prorate salary for one employee, but what if you have two, three, or more employees coming in (or leaving) at once? And at different pay grades?
BrioHR’s payroll module makes salary calculations easy. BrioHR automates payroll setup for new employees, as well as automatically calculate all salary-related data. All you have to do is check and approve.
With 9 powerful modules, BrioHR’s software covers the entire employee journey from recruitment to onboarding, payroll and claims, to performance and analytics, and more.
This enables business owners and HR teams to truly focus on what matters most – people.
Visit briohr.com and get a free demo now.
