New Employee Mid-Month Start: How Do I Calculate Their Salary?

Dear Sir,

If someone has joined in the middle of the month, how can I calculate his salary?

Thanks,
Ram V.

Dear Ram V.,

The salary of an employee depends upon his salary rate, i.e., piece rate, daily rate, or monthly base rate. Mostly, companies are adopting a monthly wage rate system. It can be calculated as Monthly wage rate * number of days worked / total number of days in that month.

For example, if an employee joins on the 16th of January at a gross salary of 10000, then his salary will be:
= 10000 * 16 / 31
= 5161 Rs.

In the same way, we can calculate the salary for others.

His salary is calculated on a monthly basis (30 working days). For example, if he joined in July, a month with 31 days, how can I calculate his salary? Please advise.

Thanks, Ram.V

Hi,

The method is the same; only the working days would differ. For example, if a month has 30 days, divide it by 30. If it's 31 days, divide by 31. Very simple.

Dear Vasu,

If you want details regarding PF and ESI, there are a lot of threads available on citehr. Additionally, you can also Google to find answers to your questions. However, please mention the salary structure, i.e., Gross salary for ESI, and Basic, DA, and retention allowance for the calculation of PF. Also, specify all the deductions your company is making under the head of deductions.

As for payroll, it is a process of documentation for paying salaries to employees. It can be done manually (using registers, etc.) or by using computers, which makes the process easier. For example, my company uses Microsoft Excel for this purpose. In this system, an employee's data is maintained, including Name, DOJ, No. of days worked in the month, Basic salary, DA, HRA, Conveyance allowance. All these details are used to calculate the gross salary, from which deductions like PF, ESI, telephone charges, among others, are made to arrive at the net salary. This information can be organized neatly in a single sheet. This is a brief overview.

Please be specific about your doubts so that we can assist you better.

Regards,

Shreekanth.P.R

Salary calculation is always a chaotic manner. If an employee's salary is to be calculated when he/she has joined an organization in the middle of a month, it is a usual practice that either 30 or 31 is the guideline. If it is February, it is usually an average of 30 days. It is the collective agreement with the unions or, if no union, it is the unanimous agreement of all the employees. No labor law or rule has set a system to it. The usual salary calculation is 30 only, which has been the practice in all organizations in India.

Dear Mr. Ramuvid,

It's very simple to calculate the salary for an employee. If his salary is 10000 and he has attended 16 days in the month of July, then the formula is 10000/31 * 16 days. Is that clear now?

Chaman Verma

In such a case, the salary should be calculated proportionately. The monthly salary should be divided by the days of the month and then multiplied by the days worked.

Regards,
M.L. Barber