You can configure an Auto Pay Rule in Dayforce to prorate salary based on averages for the year. This can be helpful in the following cases:
- If an employee is hired after the start of a pay period
- If an employee is terminated before the end of the pay period
- If an employee's salary changes after the start of a pay period
- If an employee's salary changes and has been back-dated
To do this, select a mid-period proration option in the Mid-period proration drop-down list in the Auto Pay Rule for the applicable payroll policy. These options determine how the application calculates mid-period proration amounts:
- Annual 260 Business Days
- Annual 312 Days
- Annual 365 Days
- Business Days - 5 Days a Week
- Business Days - 6 Days a Week
- Not Enabled
When the application prorates auto pay, it performs the following calculations:
- It determines the employee's normal amount of hours in the pay period. This amount is the number of hours in the full pay period, defined in the employee's records in the People feature. Depending on whether the employee works in a pay group with a weekly, bi-weekly, semi-monthly, or monthly pay frequency, the application pulls this number from different fields on the employee's records.
- It counts the number of days in the full pay period. Depending on which mid-period proration option you selected in the Mid-period proration drop-down list, the application might or might not consider weekend days to be business days. The number of business days in a pay period can vary depending on when the pay period occurs and the pay frequency. For an employee with a monthly pay frequency, there will be a different number of business days in February compared with March. If the employee was hired in mid-February, the number of business days the application counts is different than if the employee was hired in mid-March.
- It calculates the amount of hours per day by dividing the normal amount of hours in the full pay period by the number of days in the pay period.
- It determines the number of days during the pay period that the employee worked.
- It assigns the employee auto pay earnings that equal their pay rate multiplied by the number of days they worked multiplied by the amount of hours per day.
The options in the Mid-period proration drop-down list in the Auto Pay Rule are:
Annual 260 Business Days
Select this option to configure the rule to prorate the auto pay employees earn based on the yearly average of 260 business days for the year. See Mid-Period Proration of Auto Pay by Annual 260 Business Days.
Annual 312 Business Days
Select this option to configure the rule to prorate the auto pay employees earn based on the yearly average of 312 business days for the year. See Mid-Period Proration of Auto Pay by Annual 312 Days.
Annual 365 Days
Select this option to configure the rule to prorate the amount of auto pay employees earn based on the yearly average of 365 days for the year. See Mid-Period Proration of Auto Pay by Annual 365 Days.
Business Days - 5 days a week
Select this option to configure the rule to prorate the amount of auto pay employees earn based on days in the week (Monday to Friday). For example, when an employee is hired on the Wednesday of a weekly pay period and only works three business days, the rule auto-pays the employee a prorated amount for the three days worked. See Mid-Period Proration of Auto Pay by Business Days - 5 Days a Week.
Business Days - 6 days a week
Select this option to configure the rule to prorate the amount of auto pay employees earn based on days in the week (Monday to Saturday). See Mid-Period Proration of Auto Pay by Business Days - 6 Days a Week.
Not Enabled
No mid-period proration will take place. The rule does not prorate the amount of auto pay employees earn. When employees are hired or terminated mid-pay period, the rule pays them the full amount as if they worked the entire pay period.
As well, if Not Enabled is selected, the rule does not prorate the earning amounts if employees change pay groups mid-pay period. So, if an employee working in a pay group with a weekly pay frequency is switched to a pay group with a semi-monthly pay frequency after working three days in the first week of the month, the rule pays the employee their auto pay earnings for both the entire weekly pay period and the entire semi-monthly pay period. If the employee earned $1,000 in a weekly pay period of auto pay earnings and $1,750 in the semi-monthly pay period, the application would pay the employee $2,750 in auto pay earnings during the first half of the month, $1,000 for the first week when the employee belonged to the weekly pay frequency pay period and $1,750 for the semi-monthly pay frequency pay period.
In this case, payroll administrators or other users with access need to create a quick entry correcting the employee's auto pay earnings.