arkarthi89 Started The Discussion:
i would like to know about the details for Loss of Pay (LOP). my doubt is how this Lop will reflect in my salary package. whether the Lop is reduced from my Basic salary or in total salary...?
whether the Lop is affect my PF & ESI...?
Dear Umesh I am asking about in what basis the Loss of pay is deducted form the salary. i need breakup for the loss of pay.
There may be many occurrence for loss of pay. It could be due to no leave credit in employee's account. It could be due to a fine. It could be due to unauthorized absence from duty or it could be also for regular absenteeism. It could also be due to a loan or an advance from the salary.
In simple terms If I have to tell you..it's no salary payable for a particular leave taken (No work / No pay). Suppose your gross salary is Rs. 20,000 out of which Rs. 10,000 is your basic pay, Rs. 5,000 as HRA and Rs. 5000 as Special Allowance and if you work for 31 days in March you'll be paid Rs. 18,800 after deduction from Provident fund Rs. 1200 (Rs. 10,000 x 12%).
Similarly, if you have no leave balance and you work for 25 days there would be a salary cut for 06 days on each allowance therefore your basic pay would be (Rs. 10,000 x 25/31)=Rs. 8065; HRA (5000x25/31)=Rs. 4032 and lastly special allowance (Rs. 5000x25/31)=Rs. 4032. Hence after deduction of EPF (8065x12%=968) you salary payable would be Rs. (8065+4032+4032)-968=Rs. 15,161.00
I hope it's clear to you.
LOSS OF PAY (LOP) is on an employee on the for the day or days one has not attended/present in this work spot. LOP is made only when an employee has LOST all the leave accrued in the leave roster. Loss of Pay is to be on the component of a the salary structure. i.e., Basic and Dearness Allowance (DA) and not on all other allowances such as HRA, Conveyance, CCA etc.,
On the exact money paid on the two components only, the PF., ESI are to be deducted. Of course, the Profession tax on the slabs followed.
In continuation of my message on LOP, please note why other components in salary structure is not chopped on a loss of pay, is that the employee has to live in the house continuously, no deduction is on HRA, He has to pay the rent to the house owner or if he/she satys in his/her own home also, no cut on this component.
Similarly, the CCA and Conveyance. Loss of pay is not on the TOTAL salary. Please note that Monthly Total salary and Cost to Company (CTC) are different. If the employee approaches the Labour Dept with the salary slip on wrong LOP calculations, the HR Dept. has to undergo a penalty.
Loss of pay always computed on gross salary level, not on basic + da
If a person is absent when he has no leave available, or when leave is not authorised, then why will the company continue to pay part of salary ?
With ref to the original question, PF and esic will be deducted on the salary you got, so obviously, the deduction will be proportionately less for the amount deducted on account of LOP
I totally by Mr. Umesh, he is right and answered the query on illustrative manner. LOP has impact on all salary component as well as on reimbursement part. So don't be confused, you will get it once you will have LOP impacted salary slip in front of you.
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