🇵🇰
Pakistan country pack — this guide covers Pakistan-specific statutory rules. Octal HR is configurable for other regions too.

How proration works

When an employee joins or leaves in the middle of a pay period, Octal HR automatically calculates the prorated salary for the partial month. You do not need to manually adjust anything — the system uses the joining date or last working day to compute the correct amount.

The proration method

Octal HR uses a single working-days method. The salary is scaled by the fraction of the month's working days the employee actually worked:

Worked days ÷ working days

Divide the days worked by the configured working days in the month, then multiply the monthly salary by that factor. The working days per month is set once, company-wide, via the working days per month setting (26 by default). The factor is capped at 1.0 — an employee can never be paid more than a full month.

Formula: Monthly salary × (Days worked ÷ Working days per month) Example: Working days per month = 26, join date 10 May Days worked in period = 17 Salary = PKR 90,000 Prorated = 90,000 × (17 ÷ 26) = PKR 58,846
One setting, applied consistently: There is no per-run choice between calendar-day and working-day methods. The single working days per month value drives every proration, so results are consistent across employees and months.

Prorating allowances

All salary components in the employee's structure — basic and allowances alike — are prorated by the same factor. There is no per-component opt-out from proration.

Mid-month resignation or termination

For employees who leave mid-month, Octal HR uses the last working day entered on the separation record. The final payroll run automatically includes:

  • Prorated salary for days worked
  • Prorated EOBI / PESSI deductions
  • WHT recalculated based on actual days worked and annualised income
  • Leave encashment and gratuity (if applicable)
Joining on the 1st: An employee who joins on the 1st of the month receives the full month's salary — no proration is applied. Proration only kicks in for joining dates from the 2nd onwards.

Was this article helpful?