Salary Calculation Confusion: How Do You Prorate Allowances for 23 Days of Work?

Hi, I'm Praveen. Can anyone tell me what prorate basis means? If an employee (BPO) worked for 23 days in a month, how do we calculate his salary? Should his DA, HRA, Conveyance, and other allowances be calculated for 23 days or 26 days? Is there a formula for this process?

Thanks and Regards

Hi Praveen,

In pro-rata basis calculation is done on the basis of the number of days worked or associated with the organization. For example, if an employee is eligible for 24 days of leave in a calendar year and one joins on the 1st of May, then on a pro-rata basis, they will be eligible for only those 8 months of leave, i.e., 16 days for that calendar year. If the salary is to be calculated for 23 days, then definitely every component will be calculated for the same number of days.

Regards,

Amit Seth.