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Edge Case: Mid-Month Employee Hire or Exit

Last reviewed: 2026-04-01

Scenario

An employee is hired or leaves the company partway through a month. The customer needs to process a partial-month payroll and generate the correct PAYE return.

Mid-Month Hire

What to do

  1. Add the employee in PAYE Returns → Employees tab with their full monthly salary
  2. Create the payroll run for the month — the employee will appear in the run
  3. Manually adjust the gross salary for the partial month (pro-rata)
  4. Finora will calculate PAYE on the adjusted amount

PAYE calculation

PAYE is calculated on the annualised equivalent of the partial salary, then divided by 12. For example, an employee hired on the 15th earning ₦300,000/month would have ₦150,000 for that month, annualised to ₦1,800,000 for the tax band calculation.

Gotcha

Finora uses the full monthly gross salary as entered in the employee record. For a partial month, the payroll administrator must manually adjust the amount in the payroll run before approval. There is no automatic pro-rata calculation based on hire date.

Mid-Month Exit

What to do

  1. Run payroll for the partial month with the adjusted (pro-rata) salary
  2. Mark the employee as inactive in the Employees tab after the final payroll
  3. Include the employee in the PAYE return for their final month

Final payroll considerations

  • Include any outstanding leave pay or severance
  • Ensure pension contribution is calculated on the pro-rata BHT
  • The employee should still appear on the PAYE return for the month of exit

After exit

Once marked inactive, the employee will not appear in future payroll runs or PAYE return generation. Their historical records remain in the system for audit purposes.

Escalation

  • Tier 1: Guide the customer through pro-rata salary adjustment
  • Tier 2: Complex exit scenarios (severance, back-pay, multiple months of adjustment)
  • Tier 3: If PAYE calculation on a partial month appears incorrect