Salary and Absence Method Configuration

In Company Setup > Pay Run Settings > Salary settings section > click edit to configure the default Salary and Absence method calculation. 

Salary method - you can select one of two rules:

• 260 - salary is calculated based on working days in a year (annual salary / 52 / Work days in a week = daily rate)
• 365 - salary is calculated based on calendar days in a year (annual salary / 365 = daily rate)

Absence method - you can select one of two rules:

260 - absence is calculated based on working days in a year (annual salary / 52 / Work days in a week = daily rate)

365 - absence is calculated based on calendar days in a year (annual salary / 365 = daily rate)

Work days - select the default work days in a week

Please see below examples of the different Salary method calculations:

260 - salary calculated based on working days in a year 
This pro rata calculation is as follows
Annual salary / 52 / amount of ork days in a week = daily rate
Pro rata pays daily rate * work days in the pay period at this salary

Example
Annual Salary 30,000, monthly 2,500, effective start date 10/02/2025, Mon-Fri work days
30000 / 52 / 5 = 115.3846
From 10/02/2025 – 28/02/2025 15 working days 
115.3846 * 15 = 1,730.77

365 – salary calculated based on the calendar days in a year
This pro rata calculation is as follows
Annual salary / 365 = daily rate
Pro rata pays daily rate * calendar days in the pay period at this salary

Example
Annual Salary 30,000 monthly 2,500 effective start date 10/02/2025
30000 / 365 = 82.1917
From 10/02/2025 – 28/02/2025 19 days
82.1917 * 19 = 1,561.65

The calculations will work the same for the two Absence methods.