What is Loss of pay?

Definition

Loss of pay is a deduction from salary for days absent without any leave balance to cover them. The size of the deduction depends entirely on which divisor the employer uses, and there is no single correct one.

How it works

A month has a different number of days depending on how you count it: calendar days, working days, or a fixed twenty-six. The same absence produces a different deduction under each, and the difference on a single day is material.

What it means in India

Indian employers commonly use calendar days, actual working days in that month, or a fixed twenty-six day divisor. The twenty-six day divisor derives from wage calculations that exclude weekly offs and appears in several statutory contexts including the gratuity formula. Whichever you choose, write it into the appointment letter or the policy, because an undocumented divisor is a dispute waiting for a month with thirty-one days.

What people get wrong

• Changing the divisor between months, usually accidentally, which produces deductions employees cannot reconcile.
• Using calendar days for deduction while using working days for overtime, so absence is punished on one basis and work rewarded on another.
• Deducting for a weekly off that falls next to an absence without a policy that says so.

Work out your own number

The arithmetic on this page is easier to check against a real salary than to follow in prose, so there is a free page that does it for you. No sign-up.

Terms this one depends on

More on leave

Where this shows up in practice

Almost everything on this page ends up as a line on a payslip or a figure in a register. Shiftelio keeps attendance, leave, salary structure and the statutory deductions in one place, so the number in the letter and the number in the payslip come from the same record.