Free tool
Loss of Pay Calculator
Enter a monthly salary and the days an employee was absent without leave balance. The calculator returns the deduction and the net salary, on all three divisors at once, so you can see which one your payroll is quietly using.
Gross wages for the month, before this deduction.
Days with no leave balance left to cover them. Half days are allowed.
August 2026 has 31 days. That only changes the answer on the calendar day basis.
Only if your policy deducts the rest day between two absent days. Leave it at zero otherwise.
| Per day pay (salary divided by 26) | ₹769.23 |
|---|---|
| Days charged (2 absent) | 2 |
| Loss of pay deduction | ₹1,538.46 |
| Net salary payable | ₹18,461.54 |
The same absence, on each basis
2 days in August 2026 is worth ₹248.14 more on one basis than on another. Nothing about the absence changed.
| Basis | Per day | Deduction |
|---|---|---|
| 26 working days (26) | ₹769.23 | ₹1,538.46 |
| Days in the month (31) | ₹645.16 | ₹1,290.32 |
| 30 days, fixed (30) | ₹666.67 | ₹1,333.33 |
An estimate for planning, not legal advice. Provident fund and state insurance for the month are worked out on the reduced wages, so a loss of pay month changes those contributions too.
A worked example: Rs 20,000 a month, two days absent in February
Priya is paid a consolidated Rs 20,000 a month. In February 2026 she was absent for two days with no leave balance left to cover them. Here is the full calculation on the 26 day basis.
| Monthly wages | Rs 20,000.00 |
|---|---|
| Per day pay (20,000 divided by 26) | Rs 769.23 |
| Days absent without leave balance | 2 |
| Loss of pay deduction (769.23 times 2) | Rs 1,538.46 |
| Net salary payable for February | Rs 18,461.54 |
Now the same employee, the same two days, on the other two bases. February 2026 has 28 days, so the calendar day basis gives a per day rate of Rs 714.29 and a deduction of Rs 1,428.57. A flat 30 day basis gives Rs 666.67 a day and a deduction of Rs 1,333.33.
Three correct answers, Rs 205.13 apart, for an absence that did not change. Nobody made a mistake. Somebody chose a payroll setting, possibly years ago, and every deduction since has followed it.
The calendar day basis has a second problem the table cannot show. Move those same two days from February to March, which has 31 days, and the per day rate falls to Rs 645.16 and the deduction to Rs 1,290.32. The identical absence is Rs 138.25 cheaper in March than in February, purely because February is short. That is a difference no payslip can explain to the person holding it, and it is why the 26 day basis is the easier one to defend.
Then the part that causes the actual arguments. Suppose Priya was absent on a Friday and the following Monday, with Sunday as her weekly off. Under a sandwich policy the Sunday is deducted too, making three days rather than two: Rs 2,307.69 instead of Rs 1,538.46. That extra Rs 769.23 is a full day of pay taken for a day she was never required to work, and Section 18 of the Code on Wages requires a deduction for absence to stay proportionate to the absence itself.
One last figure worth knowing before a long absence reaches payroll. On this salary and this basis, deductions hit the 50 percent ceiling in Section 18 at exactly 13 days.
How loss of pay is calculated, step by step
Take the wages for the month
Gross wages for the wage period, before this deduction. For a consolidated monthly salary with no split, that consolidated figure is the wages.Choose the divisor, and choose it once
Twenty six working days, the actual days in the month, or a flat thirty. Record the choice in your payroll policy and apply the same one to overtime, so the business is not paying at one rate and deducting at another.Work out the per day rate
Divide the monthly wages by that divisor. On Rs 20,000 this is Rs 769.23 at 26 days, Rs 714.29 in a 28 day February, and Rs 666.67 at a flat 30.Count only the days actually absent
Days with no leave balance left to cover them. Half days count as half. Do not add the weekly off that happens to fall between two absent days unless your written policy says so, because Section 18 requires the deduction to stay proportionate to the absence.Multiply, and subtract from the salary
Per day rate times days absent is the loss of pay. Wages minus that figure is the net salary payable for the month.Check it against the 50 percent cap
Total deductions in a wage period may not exceed half the wages under Section 18 of the Code on Wages. A long absence reaches that ceiling faster than people expect, at 13 days on a 26 day basis.
The legal basis, with sections
Deductions from wages are governed by the Code on Wages 2019, not by the OSH Code that sets working hours. One section does almost all of the work here.
- Section 18 lists the deductions an employer is permitted to make, and absence from duty is one of them. It also carries two limits that matter more than the list. A deduction for absence may not bear a larger proportion to the wages than the period of absence bears to the wage period, which is the proportionality rule that a sandwich policy has to get past. And total deductions in any wage period may not exceed 50 percent of wages.
- Section 18 also keeps the old concerted absence provision. Where ten or more employees absent themselves together without due notice and without reasonable cause, up to eight days of wages may be deducted in lieu of notice. It applies to a collective walkout, not to one person taking a day.
A warning about the number 50, because the Code on Wages contains two different 50 percent rules and they are routinely mixed up. The one above is the deduction cap in Section 18. The other is in Section 2(y), the definition of wages, and says the allowances excluded from wages may not exceed half of total remuneration, with the excess added back. They are unrelated rules that happen to share a figure. Section 2(y) decides what counts as wages in the first place; Section 18 decides how much of those wages you may take out.
The 26 day divisor is not in the Code on Wages either. It comes from the Minimum Wages Act convention that a monthly wage covers 26 working days, the paid weekly off already being accounted for inside it. That is why this calculator lets you switch the divisor rather than hiding the choice, and why it shows all three at once.
Loss of pay questions Indian employers actually ask
How is loss of pay calculated in India?
Divide the monthly salary by a number of days to get a per day rate, then multiply by the days of unpaid absence. The whole argument is which number you divide by. The three defensible choices are 26 working days, the actual days in that month, or a flat 30. On a salary of Rs 20,000 a two day absence costs Rs 1,538.46 on the 26 day basis and Rs 1,333.33 on the 30 day basis, a gap of Rs 205.13 for the same two days.
Should loss of pay be divided by 26 or 30?
Whichever you choose, use the same divisor for overtime. The 26 day divisor follows the Minimum Wages Act convention that a monthly wage pays for 26 working days, since the paid weekly off is already inside the monthly figure. It gives the higher per day rate, which is generous when you are paying overtime and harsh when you are deducting. Paying overtime on 26 and deducting on 30 means your payroll uses whichever rate favours the employer in each direction, and that is the pattern an inspector or a tribunal notices.
Can an employer deduct the weekly off between two absent days?
It is a common policy and a legally weak one. Section 18 of the Code on Wages 2019 says a deduction for absence must not bear a larger proportion to the wages than the period of absence bears to the wage period. Charging three days for two days of absence, where the third is a rest day the employee was never required to work, does not sit comfortably inside that proviso. This is the single most disputed line on an Indian payslip. If you run a sandwich policy, put it in writing in the employment terms and expect to have to defend it.
Is there a limit on how much can be deducted from a salary?
Yes. Section 18 of the Code on Wages caps total deductions in any one wage period at 50 percent of wages. On a Rs 20,000 salary using the 26 day basis, absence deductions alone reach that cap at 13 days. The Code does not carve absence out of that total, so a long unpaid absence should be checked with an advisor rather than pushed straight through payroll.
Is loss of pay the same as unpaid leave?
In practice yes, but the paperwork differs. Unpaid leave is an absence the employer approved once the paid balance ran out. Loss of pay in the narrow sense is any absence not covered by a leave balance, approved or not. The deduction arithmetic is identical. What changes is the disciplinary record, and whether the day counts towards continuous service for gratuity and bonus.
Does loss of pay affect PF and ESI?
Yes, both. Provident fund and state insurance for the month are computed on the wages actually payable, so a loss of pay month reduces both contributions. If the deduction pushes an employee below the ESI wage threshold for the month, that does not end their coverage for the contribution period, which runs six months. Do not treat a single low month as an exit.
Can an employer deduct extra wages as a penalty for absence?
Only in one narrow case, and not as a general penalty. Section 18 of the Code on Wages carries forward the old rule that where ten or more employees absent themselves together without due notice and without reasonable cause, the employer may deduct up to eight days of wages in lieu of notice. That is a concerted absence provision. It is not authority to fine an individual employee an extra day for turning up late.
How do I prove the absence if the employee disputes it?
With an attendance record created on the day, not reconstructed at month end. A register filled in from memory once payroll is already running carries very little weight in a wage claim. A timestamped clock-in and clock-out per employee per day is what settles it, and it is the same record that supports every other figure on the payslip.
A deduction is only as sound as the attendance behind it
Every figure on this page rests on knowing which days a person was actually absent, recorded on the day it happened rather than reconstructed while payroll is already running. Shiftelio keeps a timestamped clock-in and clock-out per employee per day, tracks the leave balance those days are drawn against, and carries what is left over into the payslip without anybody retyping it.
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