Salary Deductions and Unpaid Leave: How Do MNCs Calculate Pay?

My question is directed to those involved in salary computation: How is it calculated when an employee has a deduction or takes leave without pay?

Salary Calculation Methods

Per Day Salary = Gross Salary / Number of Working Days

Per Day Salary = Gross Salary / Number of Monthly Days

What is the common practice followed by most MNCs and corporations?

Thank you.

The calculation of LOP is done in both ways depending on how the employees are paid:

1) Per Day Salary Calculation for 26 Days

- Per Day Salary = Gross Salary / Number of Working Days. This is applicable if the employees are paid for 26 days a month, i.e., excluding Weekly Offs.

2) Per Day Salary Calculation for 30/31 Days

- Per Day Salary = Gross Salary / Number of Monthly Days. This is applicable if the employees are paid for the complete 30/31 days of the month, i.e., including Weekly Offs.

Most companies pay the employees for 30/31 days, so the second method is usually used.

As Shamin said, it will mostly be the monthly gross divided by the number of days in a month.

Disadvantages of Leave Without Pay

What are all the disadvantages of Leave Without Pay? Does it affect current salary, bonus, and if Leave Without Pay is not sanctioned, does it count as a break in service? Also, what are the disadvantages of unsanctioned Leave Without Pay? Does it impact current salary, bonus, Provident Fund, Gratuity, etc.? By highlighting the disadvantages, can absenteeism be minimized? Your views are important.

Regards,
AK Mathur