How to Transition Salary Calculations from Monthly to Working Days and Communicate It to Employees

Guidance on Shifting Salary Calculation Method

Can someone guide me on how to shift from a 30/31-day salary calculation process to a working days (20/21 days) salary calculation? What communication should be sent to employees, including the reasons and benefits of changing the process?

Regards,
Swapna

Hi, salary is calculated based on the total working days of the month, which means the salary would be counted as:

The amount * present days / total working days = net salary.

If the amount is 10,000/- and present days are 25 days, then the calculation would be:

10,000 * 25 / 28 = 8,928 (considering the month of February with 28 days).

With regards,
Bejji's

• What has prompted you to shift from a calendar days (30/31 days) system to an Actual Working days system? There must be some benefits either to the employer or employee. You have to reproduce the same in communication.
• According to me, there is less benefit to the employee under the new system, in case of Absence or Leave Without Pay, since you are reducing the Denominator. But in communication, you may convey that the new system is introduced to discourage Absenteeism and Leaves Without Pay.
• In general, I am against your new system, which is not fair to employees.

In this case, how can an employee receive their full salary if Sundays are not considered? Please guide me.

Thank you.

Also, can they count festivals, public holidays, and national holidays as non-working and non-payable days and reduce the denominator further? In this case, working days and days payable will keep changing, and in the month with more holidays, an employee has to bear more loss if there is a Leave of Pay (LOP).

What if the company is not considering national holidays as 'days payable' to keep the denominator low? Is that legal? This company has less than 20 employees, by the way, and they take advantage of many exemptions being a small company. Can somebody please guide with legal citation?

This is urgent.

Thanks.

Regards,
Narayan Swamy
Bangalore

I want to know the salary calculation method in a month. Is it based on 26 days or 30 days?

Regards,
Rajeswari.

Here is a simple format of a salary sheet.

Regards,
Rajneesh Sharma
[Phone Number Removed For Privacy Reasons]

Dear Swapna,

What is the reason for changing the calculation mode? What is the status of your establishment? i.e., whether it is a factory under Factories Act or whether the establishment is under Shops and Establishments Act. Has there been any bilateral agreement signed to this effect?

Kindly clarify the above to arrive at specific advice.

Arun Dixit
9420 69 6660
020 2437 6185

The mode of calculation of salary/wages largely depends on the terms of the contract of employment between an employee and an employer. This may also be in accordance with the Certified/Model Standing Orders/Payment Terms bilaterally accepted between an employee and employer, and various enactments as applicable to the particular establishment.

In my opinion, for the regular and punctual employee, the calculation mode hardly makes any difference. If one is present on duty throughout the payment period, takes leaves with prior approval, and in general, contributes to the organizational discipline, then for them, no questions arise regarding deductions due to absenteeism, whether the denominator is reduced or not.

Linking Leave Records with Salary Sheets

Can we link our leave record (working days) with the salary sheet of each month to create an automatically generated salary sheet? All we have to do is enter the number of working days in the leave record. Is it possible? Via Excel VBA, please guide me on this process.

On the main page, via a drop-down menu, we can select the month. This action will open a salary sheet format for that particular month, which should also be connected to the working days in the leave record sheet that we have prepared. Please guide me on how to achieve this.

Dear Sir,

Please provide information regarding how to calculate the loss of payment, whether gross salaries are included.

Thank you.