Prorated Salary in Malaysia: A Simple Guide for Employers
- Harshiney
- Jun 13
- 3 min read
Updated: 3 days ago
Whether someone joins mid-month, takes unpaid leave, or resigns before payday, calculating a prorated salary is part of the job when managing payroll. And while it might sound complex at first, it’s pretty straightforward once you know the basics.
This guide will walk you through what prorated salary is, when it applies, how to calculate, and what to consider.
4. FAQs
What is Prorated Salary?
Prorating salary is something you’ll likely come across quite often. Whether someone joins or leaves in the middle of the month, or takes unpaid leave, you’ll need to adjust their pay to reflect the actual days worked. This type of calculation only applies to employees who are paid every month. For employees who are paid by the hour, it is more straightforward. You calculate their total hours worked.
How to Calculate Prorated Salary?
In Malaysia, the Calendar Days Method is the most widely used and accepted approach.
Here’s the prorated salary formula:
Monthly Salary ÷ Total Days in the Month × Days Worked
This method counts all the calendar days of the month, whether it’s 30, 31, or even 28 days. This gives a fair breakdown based on how many days the employee worked.
Prorated Statutory Contributions
When calculating prorated salary, don’t forget the impact on statutory deductions. Contributions like EPF, SOCSO, and EIS are all based on the employee’s actual wages for the month. That means if someone works half a month, their statutory payments should be based on their prorated salary, not the full monthly amount.
Example: Employee Joins Mid-Month
Aisyah starts her new job with you on June 15th. Her full monthly salary is RM4,000, and she works regular office hours, five days a week.
RM4,000 ÷ 30 × 16 = RM2,133.33
Contribution | EPF (11% / 13%) | SOCSO | EIS |
Employee | RM236 | RM10.75 | RM4.30 |
Employer | RM279 | RM37.65 | RM4.30 |
Net pay to Aisyah: RM2,133.33 – RM236 – RM10.75 – RM4.30 = RM1,882.28
FAQs
How to calculate prorated salary for February (28/29 days)?
Just calculate the prorated salary based on the number of days in the month—whether it’s 28, 29, 30, or 31.
Are fixed allowances like transport or meals prorated with the salary?
Yes, they are. If an employee’s salary includes fixed allowances like transport or meal allowances, those should be prorated too, using the same method as the basic salary.
How do I calculate EPF, SOCSO, and EIS for prorated salary?
Statutory contributions are based on the actual prorated salary, not the full monthly amount. Use the KWSP and PERKESO contribution tables to calculate both employee and employer shares accurately based on the adjusted pay.
Do public holidays count when prorating salary?
Yes, public holidays are included in prorated salary calculations.
What If an Employee Is Paid Hourly or Daily?
For employees paid hourly or daily, there's no need to prorate salary. Just pay them for the actual hours or days worked—easy
Automate Prorated Salary the Smart Way
Handling one prorated salary is easy. But when you’re onboarding, offboarding, and managing multiple staff changes every month, it adds up fast.
Synergy’s Payroll Services simplify the entire process. From calculating prorated salary and allowances to ensuring accurate statutory deductions, we handle the details so you don’t have to.
Our goal? To keep your payroll smooth, accurate, and fully in line with the Employment Act 1955, all without the hassle.
Reach out to us anytime at 📞 +6010-277 0718 or 📩 info@synergy-outsourcing.com.
