When an employee starts or leaves mid-pay-period, or takes unpaid leave, you prorate their salary for the partial period. The method depends on whether you pay salaried employees by calendar days or by working days — and the two can differ by a day or two.
Method 1: Calendar-Day Proration
Prorated pay = (Annual salary / 12 / days in month) x days worked
Example: an employee earning $60,000/year starts on June 16, 2026. June has 30 days. Daily rate = $60,000 / 12 / 30 = $166.67. Days worked = 15 (June 16-30). Prorated pay = $166.67 x 15 = $2,500.00.
Method 2: Working-Day Proration
Prorated pay = (Annual salary / 12 / working days in month) x working days worked
Using the same June 2026 example, June has 22 business days; if the employee works 11 of them, prorated pay = ($60,000 / 12 / 22) x 11 = $2,500.00. In months where weekends cluster, the two methods diverge.
Which Method to Use
Many US employers use calendar-day proration for simplicity and consistency. Some use working-day proration to avoid paying for weekends an employee would not have worked. Your employee handbook or state rules decide; stay consistent within a pay cycle.
Count the Days Precisely
Don't hand-count — it's where off-by-one errors creep in. Our Days Between Dates Calculator returns the exact day count, and our Business Days Calculator returns working days excluding weekends and federal holidays. Feed either into your proration formula.
Authoritative References
Proration is an employer policy governed by the FLSA for overtime and by state law for final pay. For background see the U.S. Department of Labor (dol.gov). This article is informational only — follow your handbook and state rules.