How is loss of pay (LOP) calculated in India?
Divide the gross monthly salary by your divisor to get the per-day rate, then multiply by the number of unpaid days. For a 60,000 rupee salary on a 30-day divisor, one unpaid day costs 2,000 rupees. The law does not set one divisor for ordinary LOP in private companies, so the number your policy uses has to be written into the offer letter or leave policy.
Should loss of pay be calculated on gross salary or CTC?
On gross monthly salary, which is what the employee actually earns in the month. CTC also includes employer PF contributions, the gratuity provision, and insurance cover that are not paid out monthly, so a CTC-based deduction overstates the LOP.
Should I use a 30-day or 26-day divisor for LOP?
Either is common, and neither is mandated for LOP. A 30-day divisor gives the same daily rate whatever the month length. A 26-day divisor treats Sundays as non-working days, and the gratuity formula also uses 26 working days a month. Pick one, apply it to every employee, and state it in the leave policy so each payslip can be explained.
Do weekly offs and public holidays count as loss of pay days?
Not normally. LOP applies to unpaid working days. Weekly offs and holidays are already part of the monthly salary, so they are not deducted unless your policy has a sandwich rule that treats the weekend or holiday between two unpaid days as unpaid too. Apply a sandwich rule only if it is written into policy.
Can loss of pay be recorded as a half day?
Yes. A half-day absence without approved leave is entered as 0.5 unpaid days and calculated on the same divisor. Clan's working-days processing counts half days correctly, and each payslip records which method was used.
Does loss of pay also reduce PF and ESI?
In most payroll setups, yes. PF is calculated on the basic wages earned in the month and ESI on the gross wages paid, so an LOP deduction also lowers those contributions. The exact base depends on your salary structure, so check the figures on the PF & ESI calculator.