How Do Indian Software Companies Calculate Loss of Pay: 30 Days or 22 Days?

Dear All,

I am working for a software development company and I need a small clarification. How is the Loss of Pay calculated normally? Is it calculated including the weekends, i.e., salary divided by 30 days and multiplied by days payable, or salary divided by 22 days (excluding weekends) and multiplied by days payable? As far as I know, in Indian companies, the salary is paid on a monthly basis, and for calculation purposes, we consider 30 days pro-rated. I have heard that in US companies, it is the opposite; the salary is paid for 22 days, and LOP calculation is also based on 22 days.

Please let me know how this is done in Indian software companies.

Thanks,
Geetanjali

Hi,

I am an HR professional working in an IT company. We also have LOPs. We pay based on working days only, excluding weekends and holidays. This is the policy our company follows, which is common among most companies.

I also have the same doubt. Can anyone give detailed information on this topic? It will be helpful if we can get detailed information about the calculation of LOP's in IT companies and the Leave Policy followed in IT/ITES industries.

Regards,
Namratha

Dear, you just need to follow the simple formula:
(Total Wage / Total number of days in a month) x Number of days worked.
For example,
Total Wage will be 3500 in the month of Dec09.
Total Days worked = 20 (including leave, Sunday, and Holiday).
Then,
(3500 / 31) x 20 = 2258.00

Regards,
Ajay Desai
Email: desai_ajay@rediffmail.com

Hi Rajesh,

You have mentioned that it is Salary * Paid days / Calendar days of the month. Can you please explain with an example?

Regards,
Namratha

Everyone is saying salary / number of days in a month * number of days worked. Can anyone tell us what salary means? Is it Gross or Net (NTH) or CTC?

Thanks,
Rajesh Kumar

Calculation of Loss of Pay (LOP)

For the calculation of LOP, actual scheduled working days will have to be taken into account. For example, in a month, if the scheduled working days are 26, then for every LOP day, the employee will lose 1/26 of their salary instead of 1/31. Only then will the loss be more significant, and the employee will be discouraged from being on LOP.

I guess we have to take the total number of days in the month, divide it by the gross salary, and multiply it by the number of leaves. Please let me know what are the other ways of calculating the LOP?