Prorate computing refers to the concept of calculating a component based on the number of days an employee has worked.

For example, let us take Loss of Pay (LOP). You will observe that the employee is being paid for 29 days. This process of taking 3000 for 30 days and calculating the amount to be paid for 29 days, is called as prorate. This is also the case for newly joined employees. When a person joins on 18th of the month then that employee is paid only for 13 days (i.e. from 18th to 30th). This is also a good example of prorate computation logic. Similarly, when an employee leaves on 18th of the month then payment is only for 18 days (i.e. from 1st to 18th).

A normal way of doing pro-rating is Component-value*Days worked/Days in the Month. For example, if the basic salary of an employee is Rs. 3000 in the month of April and the person has joined on 18th of April then the basic salary for the month is calculated as 3000*13/30. In a similar logic, if employee left service on 18th of April then basic salary is calculated using 3000*18/30.

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