Per-day salary is the monthly salary divided by the number of days your company uses as the base: the calendar days in that month (28 to 31), a fixed 30 days, or a fixed 26 days. Loss of pay (LOP) is the per-day salary multiplied by the number of unpaid days. For a ₹30,000 salary with 2 LOP days in a 31-day month, the calendar-day method gives a deduction of ₹1,935.48, the fixed 30-day method ₹2,000 and the fixed 26-day method ₹2,307.69. No single method is laid down for monthly-paid staff, so choose one, write it in your policy and use it every month.
The formula
- Per-day salary = monthly salary ÷ base days
- LOP deduction = per-day salary × LOP days
- Salary payable = monthly salary − LOP deduction, which is the same as per-day salary × paid days
LOP days are days for which no salary is due: absence without leave, leave taken after the balance is used up, and days before joining or after leaving in that month. Paid days are everything else, including weekly offs, holidays and approved paid leave.
Three ways to count the base days
| Method | Base days | Effect |
|---|---|---|
| Calendar days | Actual days in the month: 28, 29, 30 or 31 | Weekly offs and holidays are paid days. The per-day rate changes a little each month. A full month always gives exactly the monthly salary. |
| Fixed 30 days | 30 every month | Same per-day rate all year. Simple to explain, but in a 31-day or 28-day month the arithmetic for part-months needs a clear rule. |
| Fixed 26 days | 26 every month (30 less four weekly offs) | Per-day rate is higher, so each absent day costs more. Weekly offs are not counted as separate paid days. |
The 26-day base is common for daily-rated and factory workers and is the divisor the gratuity law uses for monthly-rated employees. For ordinary monthly salary, the choice is a matter of company policy and the terms of employment.
Worked example: two days of unpaid leave
Monthly salary ₹30,000. The employee has 2 LOP days in a month of 31 days.
| Method | Per-day salary | LOP for 2 days | Salary payable |
|---|---|---|---|
| Calendar days (31) | ₹30,000 ÷ 31 = ₹967.74 | ₹1,935.48 | ₹28,064.52 |
| Fixed 30 days | ₹30,000 ÷ 30 = ₹1,000 | ₹2,000 | ₹28,000 |
| Fixed 26 days | ₹30,000 ÷ 26 = ₹1,153.85 | ₹2,307.69 | ₹27,692.31 |
The difference between methods is small for one or two days and grows with longer absences, which is why the method should be fixed in advance.
Worked example: joining in the middle of the month
Monthly salary ₹30,000. The employee joins on the 16th of a 30-day month and is present or on a paid day from the 16th to the 30th. That is 15 paid days out of 30 calendar days.
With the calendar-day method, salary payable is ₹30,000 ÷ 30 × 15 = ₹15,000. The same approach applies to an employee who leaves mid-month: pay for the days up to the last working day.
Points that cause disputes
- Weekly offs and holidays next to an absence. Some companies treat an off day between two absent days as unpaid (the "sandwich" rule). If you follow this, state it in the leave policy.
- Half days and late marks. Decide how many late marks make a half day and whether a half day is taken from leave or becomes half a day of LOP.
- Which components are reduced. LOP normally reduces every monthly earning in proportion: basic, HRA and allowances. PF and ESI are then calculated on the reduced wages. See PF rules and ESI rules.
- Attendance cycle. If payroll is closed before month end, say from the 26th to the 25th, absences after the cut-off are adjusted in the next month.
Whatever method you use, the deduction for absence should not be more than the wages for the period of absence. Show the per-day rate, paid days and LOP days on the payslip so the employee can check the figure.
How FundRaksha HR shows it
In FundRaksha HR, attendance and leave flow into salary automatically. Leave beyond the balance becomes unpaid automatically, and week-offs and holidays inside a leave period are not counted as leave. The employee sees a live salary forecast during the month and a breakdown of each month with the per-day rate, paid days and LOP. See features.
Frequently asked questions
Should per-day salary be calculated on 26 days or 30 days?
Either can be used for monthly-paid staff, as can the actual calendar days of the month. The law does not fix one method for monthly salary. Choose one, record it in your policy or appointment letters and apply it to everyone every month.
What is LOP in salary?
LOP means loss of pay. It is the salary not paid for days with no pay entitlement, such as absence without leave or leave taken after the balance is exhausted.
Are Sundays and holidays counted as paid days?
With the calendar-day and 30-day methods, weekly offs and holidays are paid days unless your policy treats an off day between absences as unpaid. With the 26-day method, weekly offs are already left out of the base.
Is PF calculated before or after LOP?
After. PF and ESI are calculated on the wages actually earned for the month, so LOP reduces them in proportion.
How is salary calculated for an employee who joins mid-month?
Pay per-day salary for the paid days from the date of joining to the end of the month. For example, ₹30,000 a month and 15 paid days in a 30-day month gives ₹15,000 on the calendar-day method.
This guide is general information for Indian employers, not legal or tax advice. Rates and rules change; confirm the current position with EPFO, ESIC, your state department or your consultant before acting.
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