New Employee Salary Dilemma: How Do You Calculate Pay for Mid-Month Starters?

When a new employee joins in the middle of the month, how do we calculate their salary for the first month? We use the 30-day per month formula to arrive at the daily salary for loss of pay, etc. If an employee joins on March 3rd, should we also consider the 31st and pay 29 days' salary, or should we only consider up to the 30th and pay 28 days' salary?

Dear,

In this case, you should take 30/31 into account, not fixed 30, and you are required to pay 29 days' salary in this case.

Thanks,
J.S. Malik

You should consider the actual number of days as per the calendar month for the first month's pay calculation. Please find attached a short note illustrating the problem in using a fixed number of days (such as 30 or 31) for pay calculation.

The same logic applies to the calculation of last month's pay when an employee leaves an organization in the middle of a month.

T. E. Gautham
Tandem Integrated Business Solutions