This guide is for Malaysian business owners who hire employees mid-month. Let us explain how salaries and benefits are affected when someone starts working partway through a month.

What are prorated salaries?

Imagine you pay someone RM4,000 a month, but they only start on the 15th. In this case, their pay for the half-month would be around RM2,000 (actual calculation depends on number of days). This is called a prorated salary.

How does this affect EPF (savings for retirement)?

Both you and your employee contribute a portion of their salary to EPF each month. Since their first paycheck is smaller, their EPF contribution will also be smaller. This is fair because it reflects how much they actually worked.

What about bonuses, commissions, and holiday pay?

If bonuses or commissions are based on monthly performance, they might also be prorated for new employees. Similarly, if a public holiday falls within their first month, their holiday pay would be based on their reduced salary.

How about leave (vacation and sick days)?

New employees don't get the full amount of leave right away. Their leave entitlement is adjusted based on how much of the year they'll be working. This is fair because they haven't been with the company the whole year.

How can I make payroll easier? can help you automatically calculate prorated salaries and ensure proper EPF contributions. This saves you time and avoids mistakes.

When someone starts mid-month, their first paycheck and some benefits are smaller to reflect the shorter work period. We can help you manage this process.

Let us help you.

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