Pay periods in Payroll

Modified on Thu, 20 Apr, 2023 at 4:54 PM

A pay period refers to the frequency with which your employees are paid. In Kenjo, you can find the following pay periods:

Pay periods		Description	Salary calculation
Monthly	Monthly calendar month	Salary is paid every month The employee will receive 12 paychecks a year The pay period start on the 1st of the month and end on the last day of the month (27, 28, 30, 31) This is especially useful for employees who receive a fixed monthly salary (for example, 01.01 - 31.01) Even if your export day is before 31.01, the full monthly salary will still appear on your list.	Employee’s monthly salary OR Employee’s yearly salary / 12
	Monthly starting on	Same conditions as the Monthly calendar month, BUT you can establish when do you want to period to start every month
Bi-monthly or Semi-monthly		Salary is paid twice a month The employee will receive 24 paychecks a year By default, the first pay period will start on the 1st of the month until the 15th of the month and the second pay period will go from the 16th of the month until the end of the month. Especially useful for Latin American countries, such as Mexico	Employee’s monthly salary / 2 OR Employee’s yearly salary / 24
Weekly		The employee will receive their salary each week The employee will receive 52 paychecks a year The pay period will go from one day of the week plus 7 days. For example, from Thursday of the current week, till Wednesday of the next week. Especially useful for Latin American countries, such as Mexico	Employee’s monthly salary * 12 / 52 OR Employee’s yearly salary / 52
Variable, depending on confirmation date		Not a pay period as such. With this configuration, you can establish an open-ended payroll period. The closing date will depend on the date you confirm for your payroll under People > Payroll > CONFIRM. The next payroll period will start the following day.

Once you have set up your payroll groups considering one of the pay periods from above, you will see this information reflected on People > Payroll > Select payroll group.

The expected hours and tracked hours will depend on the pay frequency you have selected and the salary will correspond to it.

Prorate salary calculation

If there is an employee salary adjustment or the employee starts or leaves the company in the middle of a pay period, a proration will apply. In Kenjo, we prorate the salary based on the days of the month.

Let’s take a look at these examples.

Example for monthly pay period:

An employee receives a salary increase on the 16th of the month.

Salary A: 1.000 euros

Salary B: 1.200 euros

Prorate salary calculation for all days of the period

Salary to increase on

16th of January (31 days)

(15/31) * 1000 = 483,87

(16/31) * 1200 = 619,35

483,87 + 619,35 = 1.103,22

Salary to increase on

16th of February (28 days)

(15/28) * 1000 = 535,71

(13/28) * 1200 = 557,14

535,71 + 557,14 = 1092,85

Salary to increase on

16th of April (30 days)

(15/30) * 1000 = 500

(15/30) * 1200 = 600

500 + 600 = 1.100

Example for bi-monthly pay period:

An employee receives a salary increase on the 18th of a month, which corresponds to the second pay period in a bi-monthly configuration.

Salary A: 1.000 euros

Salary B: 1.200 euros

Prorate salary calculation for all days of the period

Salary to increase on

18th of January

(Pay period from the 16th to the 31st)

(3/16) * 1000 = 187,5
(13/16) * 1200 = 975

187,5 + 975 = 1.162,5

Salary to increase on

18th of February

(Pay period from the 16th to the 28th)

(3/13) * 1000 = 230,77

(10/13) * 1200 = 923,08

230,77 + 923,08 = 1.153,85

Salary to increase on

18th of April

(Pay period from the 16th to the 28th)

(3/15) * 1000 = 200

(12/15) * 1200 = 960

200 + 960 = 1.169

Note: In this example, the numerator is considering the actual total days of the period that the employee receives a certain salary (and not the effective working days) regardless of the chosen calculation approach.