When managing employee compensation, it’s crucial for HR professionals and employers in Singapore to correctly calculate incomplete month salary. Whether it's due to new hires joining mid-month, resignations, unpaid leave, or terminations, employers must ensure compliance with MOM regulations while maintaining payroll accuracy.
In this comprehensive guide, we will break down what incomplete month salary means, when it applies, how to calculate it, and how HR software like Gutsy can make your payroll processes seamless.
What is Incomplete Month Salary?
Incomplete month salary refers to the prorated salary an employee receives when they do not work the full calendar month. This situation typically arises during:
- The employee’s first or last month of employment
- Periods of unpaid leave
- Mid-month resignations or terminations
To maintain fair compensation and remain compliant with employment laws in Singapore, employers must calculate this portion of salary accurately and transparently.
When Does Incomplete Month Salary Apply?
Employers in Singapore must issue incomplete month salary in various situations, including:
1. New Employees Joining Mid-Month
If an employee joins on, say, the 15th of the month, they’re only entitled to payment from the 15th to the end of the month, rather than the full month’s salary.
2. Resignations or Terminations
When an employee resigns or is terminated before the month ends, only the days worked should be compensated.
3. Unpaid Leave
If an employee takes extended unpaid leave, the salary should reflect only the working days during that month.
4. Other Special Circumstances
Maternity leave, childcare leave, or national service could affect how much salary is paid, depending on whether such leave is paid or unpaid.
MOM’s Recommended Formula
The Ministry of Manpower (MOM) recommends the following formula for calculating incomplete month salary:
(Monthly Gross Rate of Pay / Total Number of Working Days in the Month) × Number of Days Employee Worked in That Month
What’s included in “Monthly Gross Rate of Pay”?
- Basic salary
- Allowances (e.g., transport, meal, shift)
- Commissions (if not variable)
- Bonuses (if contractual and regular)
Note: CPF contributions, overtime, and reimbursement claims are excluded.
Working Days vs Calendar Days
MOM's formula is based on working days, not calendar days. This generally includes Monday to Friday and excludes weekends and public holidays, unless otherwise specified in the employment contract.
Examples of Incomplete Month Salary Calculations
Let’s look at a few practical examples to understand how this formula is applied.
Example 1: New Hire Mid-Month
Employee A joins on 15 April 2025.
- Gross monthly salary = $4,000
- April has 22 working days
- Employee worked 12 days (15 April – 30 April)
Calculation:
($4,000 / 22 working days) × 12 days = $2,181.82
Incomplete month salary = $2,181.82
Example 2: Resignation Mid-Month
Employee B resigns with the last working day on 10 May 2025.
- Monthly gross salary = $3,500
- May has 21 working days
- Employee worked 8 days (1 May is a public holiday)
Calculation:
($3,500 / 21) × 8 = $1,333.33
Incomplete month salary = $1,333.33
Example 3: Employee Takes 5 Days of Unpaid Leave
Employee C takes 5 unpaid leave days in June 2025.
- Monthly salary = $5,000
- June has 20 working days
- Employee worked 15 days
Calculation:
($5,000 / 20) × 15 = $3,750
Adjusted salary = $3,750
Common Scenarios for Incomplete Month Salary
Here’s a breakdown of real-world situations HR professionals often deal with in Singapore:
| Scenario | Is Incomplete Month Salary Applicable? |
|---|---|
| Employee joins on the 10th | Yes |
| Employee resigns on the 18th | Yes |
| Employee takes unpaid leave for 3 days | Yes |
| Employee takes paid leave | No |
| Employee is suspended without pay | Yes |
| Employee is serving garden leave (paid) | No |
Why Accuracy in Incomplete Month Salary Matters
Here’s why HR professionals in Singapore must pay close attention to incomplete month salary:
- Legal Compliance: Inaccurate calculations can breach MOM regulations, leading to audits or penalties.
- Employee Trust: Fair pay enhances employee satisfaction and reduces disputes.
- Payroll Transparency: Transparent salary breakdowns reduce confusion, especially for resigning or new staff.
- Operational Efficiency: Standardising calculations ensures consistency across departments and offices.
How Gutsy Simplifies Salary Calculations
At Gutsy, we understand that managing payroll in Singapore can be challenging—especially when it comes to pro-rated salaries and compliance.
Here’s how Gutsy can help:
1. Automated Proration
Gutsy automatically calculates incomplete month salaries based on your set working day configurations.
2. Integrated Leave Management
Unpaid leave, maternity, and other absences are tracked in one platform—so your salary proration reflects real-time data.
3. CPF, SDL, and Tax-Ready
Gutsy’s payroll module ensures CPF contributions are computed correctly based on actual earned salaries, not estimations.
4. Custom Working Calendars
Different employees, shifts, or locations? No problem. Gutsy lets you customise working days and holiday schedules.
5. Transparent Payslips
Generate itemised payslips showing prorated breakdowns to enhance employee understanding and trust.
6. Built for Compliance
Stay in line with MOM’s recommendations without memorising formulas or manually adjusting spreadsheets.
FAQs of Incomplete Month Salary
Q1: Can I use a calendar-day formula instead?
You may, only if specified in the employment contract. MOM recommends using the working-day formula for fairness and consistency.
Q2: Are weekends counted as working days?
Only if stated in your employee’s contract (e.g., retail or F&B sectors). Otherwise, standard working days are Monday to Friday.
Q3: Do I include bonuses and commissions?
Only regular, contractual bonuses or fixed commissions should be included in the gross pay. Ad hoc or performance-based ones should not.
Q4: How is CPF calculated for incomplete month salary?
CPF contributions are based on actual wages paid. If an employee earns $2,181.82 for an incomplete month, CPF will be calculated on that amount.
Q5: Can I automate incomplete month salary calculations?
Yes, and it’s highly recommended! Software like Gutsy Payroll Software simplifies this process for you.
Conclusion
Incomplete month salary calculations are a necessary part of HR and payroll operations in Singapore. Whether it’s due to onboarding, resignations, or unpaid leave, getting the numbers right is key to ensuring compliance and maintaining employee trust.
While the MOM’s formula offers a fair and standardised method, manual calculations can be error-prone. That’s where automation and the right payroll software come into play.
Gutsy helps you navigate these payroll complexities with ease, accuracy, and confidence. So you can focus on what really matters—growing your team and business.
Ready to simplify payroll and ensure accurate salary proration?
👉 Book a demo Gutsy’s Payroll Software
