Let’s start with the basics.

An incomplete month of salary happens when an employee does not work for the entire wage period. This situation is very common in HR and payroll. For example:

• 🏢 Employee joins after the first day of the wage period
• 📅 Employee resigns before the wage period ends
• 💤 Employee takes unpaid leave during the month

In all these cases, the employee’s salary must be pro-rated — meaning it’s calculated according to the actual number of days they were eligible to receive wages.

💡 Key idea: Always refer to the wage period, not just the calendar month.
Your company’s wage period might be 1st–31st (calendar month), or it might run 15th–14th (mid-month cycle).

It doesn’t matter which you use — what matters is that you calculate based on the correct number of days in that specific wage period.

Under Section 60I(2) of the Employment Act 1955, when an employee does not complete a full month of work, salary must be apportioned based on the actual number of days in that wage period.

Salary for Incomplete Month = (Monthly Wages ÷ Number of days in the particular wage period) × Number of eligible days in that wage period

The Employment Act sets a minimum legal requirement — it ensures the calculation is fair and consistent across all covered employees (especially those earning RM4,000 and below, or engaged in manual labour).

It avoids overpaying or underpaying employees in short or long months (for example, February with 28 days vs. March with 31 days).

While the Act’s formula is the minimum requirement, employers can adopt any other formula if it results in a more favourable outcome for the employee.

✅ Key principle:

You can always pay more than what the law requires — but never less.

For instance:

• A company may use 30 as a standard divisor (instead of 31) to make the daily rate slightly higher.
• Or, it may choose to round up salary amounts for ease of payroll processing.

As long as the employee receives equal or higher pay than what the Employment Act formula produces, the company remains compliant.

Let’s break it down using an example.

Imagine an employee earning RM2,600/month, and the company’s wage period follows the calendar month.

• Wage period: 1 Jan – 31 Jan (31 days)
• Joined on: 20 Jan (eligible 12 days)
• Calculation: RM2,600 ÷ 31 × 12 = RM1,006.45

• Wage period: 1 Feb – 28 Feb (28 days)
• Took 2 days of unpaid leave (eligible 26 days)
• Calculation: RM2,600 ÷ 28 × 26 = RM2,414.29

• Wage period: 1 Apr – 30 Apr (30 days)
• Last working day: 5 Apr (eligible 5 days)
• Calculation: RM2,600 ÷ 30 × 5 = RM433.33

Some companies pay based on a mid-month cycle (e.g., 15th to 14th). In this case, you must still use the actual number of days in that wage period.

Imagine an employee earning RM2,600/month.

• Wage period: 15 Jan – 14 Feb (31 days)
• Joined on: 20 Jan (eligible 26 days)
• Calculation: RM2,600 ÷ 31 × 26 = RM2,180.65

• Wage period: 15 Feb – 14 Mar (28 days)
• Took 2 days of unpaid leave (eligible 26 days)
• Calculation: RM2,600 ÷ 28 × 26 = RM2,414.29

• Wage period: 15 Mar – 14 Apr (31 days)
• Last working day: 5 Apr (eligible 22 days)
• Calculation: RM2,600 ÷ 31 × 22 = RM1,845.16

✅ Yes — as long as they fall within the employee’s eligible employment period.
If you’re deducting unpaid leave, then exclude only those unpaid leave days.

Here’s where it gets interesting.

The Employment Act’s formula uses the actual number of days in the wage period (for example, 28, 30, or 31 days).
But employers are allowed to use a different divisor if it gives a more favourable result to the employee.

This method gives the employee a slightly higher daily rate, which means a higher prorated pay for incomplete months — so it’s considered more favourable and is perfectly acceptable under the Act.
In fact, many companies use this as a consistent, employee-friendly standard.

✅ Example:
RM2,600 ÷ 26 × 12 days = RM1,200
vs.
RM2,600 ÷ 31 × 12 days = RM1,006.45

Using 26 clearly benefits the employee — so it’s allowed.

This can get tricky, especially in shorter months like February.
If you use 30 as a fixed divisor, you might underpay employees in February (which has only 28 days), because the calculated daily rate would be slightly lower than the statutory formula.

⚠️ Therefore:

• You can use 30 only if the result is not less than what the Employment Act formula produces.
• If the 30-day calculation gives a lower amount, you must top up to the minimum statutory amount.

✅ Key takeaway:

Employers can use any formula — including 26-day or 30-day divisors — as long as the outcome is equal to or better than the Employment Act’s official calculation.

❌ Using 31 as the divisor when the wage period is 15th–14th and actually has only 28 days
❌ Forgetting to exclude unpaid leave days from eligible days
❌ Using different methods for different employees (inconsistent policy)
❌ Not documenting wage period dates in the employment contract

Calculating salary for incomplete months doesn’t have to be complicated — it just needs to be fair, transparent, and consistent.

If an employee works half a month, they deserve half a month’s pay — and the law gives you a fair way to calculate it.
By applying the Employment Act’s formula (or a more generous one), employers can avoid disputes and ensure employees feel confident they’re paid correctly.

At the end of the day, clarity protects both sides — the employer’s compliance and the employee’s trust.