Proration Rules

An employee is considered eligible for partial pay whenever a Job record has an effective date in the middle of a pay period. Typically, this happens whenever you hire, terminate, transfer, or change the rate of pay for an employee in the middle of a pay period.

On the Pay Group Table - Paysheets page, you select a proration rule to be applied to salaried workers and a proration rule to be applied to hourly or exception hourly workers. The rule that you select in each category determines how earnings and hours are prorated during paysheet creation for employees eligible for partial pay.

Whenever the system encounters a Job record causing partial pay, it applies one of these proration rules, depending on the employee type, and creates a separate pay earnings record with the corresponding hours or earnings for each partial period. Each proration method uses the work schedule specified for the pay group on the Pay Group Table - Paysheets page to determine the number of work days in the partial period, and then calculates the associated hours or earnings.

Additional data used to calculate hours and earnings in a prorated pay period include:

• Standard hours defined on the Job Information page in the employee's job data.

• The annualization factor of the work period frequency defined on the Job Information page in the employee's job data.

• The annualization factor of the pay period frequency entered on the Pay Group - Definition page.

• The annualization factor of the daily frequency entered on the Pay Group - Definition page.

Each proration rule uses some, but not all, of these additional factors.

Proration Rule Formulas

This table lists the formulas used to calculate proration:

Proration Rule	Calculation Formula
Salaried – Percent of Annual	Work Days × Annual Pay Rate / Work Days per Year
Salaried – Rate per Work Day	Work Days × Hours Per Day × Hourly Rate
Salaried – Percent of Period	Work Days × Pay Period Compensation Amount / Total Work Days in Pay Period
Hourly – Work Days	Work Days × Hours Per Day × Hourly Rate
Hourly – Percent of Period	Work Days × Hours in Period × Hourly Rate / Total Work Days in Pay Period

This table defines the variables in the proration rule formulas:

Proration Rule Variable	Definition
Work Days	The number of days worked that correspond to the effective-dated action on the employee's job record, such as a mid-period pay rate change. Work days are specified in the Work Schedule field on the Pay Group table.
Work Days per Year	The system calculates work days per year based on the number of work days defined in the work schedule on the Pay Group table. For example: If the work schedule has five days, the work days per year is 5 × 52 = 260. If the work schedule has three days, then the work days per year is 3 × 52 = 156. Note: Custom daily frequencies do not affect the calculation of Work Days per Year.
Hours Per Day	The employee's standard hours in Job data times the annualization factor of the work period in Job data divided by the annualization factor of the daily frequency on the Pay Group table.
Hourly Rate	The employee's hourly compensation rate in Job data.
Total Work Days in Pay Period	Based on the work schedule on the Pay Group table and the pay period begin and end dates.
Hours in Pay Period	The standard hours in Job data times the annualization factor of the work period in Job data divided by the pay period frequency annualization factor.

Important:

If an employee is set up with any active job distributions (earnings distribution type is other than none) on the Job Earnings Distribution page, the system automatically calculates the proration—or partial pay—using percent of period, in place of any other proration rule that you might have specified on the Pay Group Table - Paysheets page.