How do I run payroll for an employee who joins or exits mid-month?

For an employee who joins or leaves partway through a month, salary is paid on a pro-rata basis — only for the days actually worked in that month. The per-day rate is derived by dividing the monthly salary by the relevant number of days, then multiplying by the days worked.

The main decision is the divisor: some employers divide by the calendar days in the month, others by a fixed number of working days, and the choice should be applied consistently under a documented policy. Statutory deductions (PF, ESI, professional tax, TDS) are then applied on the pro-rated earnings, and for an exiting employee the mid-month pay is folded into the full-and-final settlement. Using a consistent, written method avoids disputes and keeps the calculation auditable.