I do not think there is any rule as to the dividing factor i.e. 31/30 or 26. It depends from organization to organization. Organizations either take 30 or 31 as they give advantage to the employees for LOP deductions. Presently, organizations like to be lenient because of intense competition. On the contrary most of the employees do not what dividing factor is considered while calculating LOP. But 26 days can be considered. For eg. If salary is 30,000, an organization stands to gain Rs.186 for one day's LOP, so if there are average 100 LOPS in an organization in one month, organization saves 18600 each month.