Purpose
Salary proration ensures employees are paid correctly when they are hired, terminated, or get a pay change mid-pay-period. They receive pay for the days actually worked at each rate, not a full-period salary. UZIO prorates automatically. This article explains exactly how, so you can verify any prorated paycheck before you approve.
Who needs this: Any user whose role includes the Payroll permission and who reviews pay runs.
When proration applies
| Event | Behavior |
|---|---|
| New hire mid-period | Paid from hire date to period end. |
| Termination mid-period | Paid from period start through the last working day. |
| Salary change mid-period | Old rate for days before the effective date, new rate from the effective date on. |
Which employees:
- Salaried employees: prorated automatically for all three events.
- Hourly employees not on UZIO Time Tracking: prorated automatically for mid-period hire and termination.
- Hourly employees on UZIO Time Tracking: no proration needed. They are paid for clocked hours.
How UZIO calculates proration
The same method applies across all pay frequencies, based on working days (Monday to Friday):
- Hourly rate is derived from annual salary (for example, bi-weekly: annual ÷ 26 ÷ 80 hours).
- Working days per pay period: UZIO counts the actual weekdays (Monday to Friday) in the pay period, excluding Saturdays and Sundays. Typically 5 for weekly and 10 for bi-weekly, and the exact weekday count of the period for semi-monthly and monthly.
- Hours per working day: period hours ÷ working days in that period.
- Actual working days:
- New hire: hire date through period end, including the hire date (weekends excluded).
- Termination: period start through termination date, including the termination date.
- Rate change: days at the old rate run from period start up to but excluding the effective date. The new rate applies from the effective date.
- Prorated pay = actual working hours × applicable hourly rate, summed across old and new rates for a mid-period change.
Worked example: mid-period salary change
John is salaried, paid bi-weekly. His salary changes from $60,000 to $65,000 effective Feb 6, 2025. The pay period is Feb 3 to 16, 2025 (10 working days, 80 hours, 8 hours per day).
| Step | Calculation | Result |
|---|---|---|
| Old hourly rate | 60,000 ÷ 26 ÷ 80 | $28.85 |
| New hourly rate | 65,000 ÷ 26 ÷ 80 | $31.25 |
| Hours at old rate | Feb 3 to 5 = 3 days × 8 | 24 hrs |
| Hours at new rate | Feb 6 to 16 = 7 working days × 8 | 56 hrs |
| Pay at old rate | 24 hrs × old rate | $692.31 |
| Pay at new rate | 31.25 × 56 | $1,750.00 |
| Prorated salary | $2,442.31 |
UZIO calculates from the unrounded hourly rate ($28.8462, not $28.85), so a prorated figure can differ by a cent or two from hand math done with the rounded rate.
Special considerations
- Holidays and PTO: employees receive holiday pay only for holidays during active employment, and approved PTO is paid only if it falls within the active period. When a salary changes mid-period, check the holiday and PTO lines on the Payroll Register before approving to confirm they carry the rate you expect for those dates.
- Overtime for salaried non-exempt employees: after a mid-period change, OT and double-OT use the prorated (blended) wage rate. In the example above: $2,442.31 ÷ 80 = $30.53 per hour.
Common mistake: Expecting calendar-day proration. UZIO prorates on working days (weekends excluded). A hire date of Saturday the 12th and Monday the 14th produce the same prorated pay.
Related articles
- Making Employee Payroll Updates: how effective dates drive proration
- Processing a Regular Payroll
- Overtime Rules Setup and Compliance Controls: blended overtime rates
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