How Do You Calculate Salary for a 26-Day Month? Seeking Advice and Insights

Discussion on Salary Calculation

I am starting a discussion on salary calculation. I am currently calculating the salary based on the number of days in the month, like this:

Total gross salary / number of days in the month x (number of working days + weekly offs).

However, I would like to know how to calculate the salary for 26 days in a month. Some companies calculate the salary for 26 days without depending on the actual number of days in that month. I hope someone can help me with this.

Thank you,

Regards,
Shoeb
[Email Removed For Privacy Reasons]

When it comes to salary calculations, there are two methods to consider:

1. Total gross / 30 * Number of worked days (if the month has 31 days, you can use 30 for all months).
2. Total gross / 31 * Number of worked days, including weekly offs (for months with 30, 31, or 28 days, calculate based on the actual number of days; otherwise, use the first option for all months with 30 days if it's 31 or 28 days).

Please avoid the practice of calculating based on only 26 days as it implies not compensating for weekly offs. This approach is not favorable from an HR perspective.

Thank you.

Salary Calculation for 26 Days

The thumb rule for calculating salary for 26 days in a month is very common across India. What you need to do is to deduct the total Leave Without Pay (LOP/LWP) in a subsequent month from 26 days (i.e., 26 - LWP days). The number that arrives will be considered as working days in that subsequent month for which you are supposed to pay salary.

Regards,
Janardan

Hi Mr. Janardan, as you specified only 26 days, then you will not pay salary for the weekly offs. Is it right?

First of all, thank you for your reply. Actually, I want to know that, as Mr. Ravi said, you may take 30 days for all months, but the actual month is 31 days. Here, some employees have 5 offs in a 31-day month, so we prepare a salary for 26 days according to a 30-day month. Therefore, 1 absence is considered for them even if they are present the whole month.

For example, in July 2014 (31 days), there are five Thursdays. If any employee has Thursday as their weekly off, we calculate the salary based on a 30-day month. We then pay salary for only 26 days with four weekly offs, but as their weekly off is five, one weekly off is considered as absent, and that's where one day goes.

Thank you,

Shoeb Anwar

Salary Calculation Based on Weekly Offs

As per the law, four weekly offs will be calculated for salary in your situation. If you are calculating the salary for 310 days, then calculate the actual weekly offs in that particular month. For example, in February, when you consider the actual days, there are only 28 days. In that case, you will pay for only 28 days.

This is a general practice. Otherwise, you can calculate based on 30 days only.

Regards

We take the gross pay for the month and divide it by the number of days in a month. Then, we multiply it by the number of working days plus the weekly off days. The system has been operational for several years without any complaints.

Salary Calculation in the Factory Act

- The 26-day calculation will be applicable under the Factory Act as they will have contract laborers. The employer will base their quote on a 26-day calculation when sending workers for contract work, not 30 days. Hence, the salary calculated will be for 26 days only, excluding weekly offs.

- The salary will be calculated for 30/31 or 28 days, depending on the month, designed specifically for corporations in the payroll software to change and calculate monthly.

- If leave is available, the system will automatically calculate it to arrive at the salary. Examples are:

GROSS PER MONTH SALARY - RS. 5000/-

Basic 50% of Gross - 2500/-

HRA 40% of Gross - 2000/-

Other allowance - 500/-

Gross pay - 5000/-

PF on basic (if DA available, please include) - 300

ESI on Gross (if OT available, please include) - 87.5

Net pay - 5000-300-87.5 = 4612.50 (take-home salary)

If It's LOP (Loss of Pay)

For example, 5 days LOP: The gross amount remains the same, but the salary is calculated based on the following, assuming the month is January:

2500 / 31 * 26 (31-5), and likewise, other components are calculated.

If It's Factory Calculation

The same salary components apply, but the total days should be calculated as 26 instead of 30 for workers.

I know this level only.

Regards,
Vijaya J

Normally, salaries are paid monthly to staff/employees, and salaries for daily-rated employees are calculated based on 26 days. Therefore, in the case of monthly salary payments, all month days need to be considered, regardless of whether it is a 30- or 31-day month.

This practice is generally followed. Since the office pays its staff monthly salaries, the calculation should be based on a month consisting of 30 days, regardless of the actual number of days in the month.

Regards,
Sunil Choughule

Salary Calculation for an Incomplete Month

Lots of Acts are discussed at great length. In my opinion, the article displayed on the website of the Ministry of Manpower sufficiently provides the facts for the calculation of the gross salary payable for the month. It is calculated based on the following formula:

Salary payable for an incomplete month of work = Monthly gross rate of pay x Total number of days the employee actually worked in that month / Total number of working days in that month.

The total number of working days in the said month should correspond to the actual working days of the month. In Ahmedabad, we have staggered days on Thursdays in the Vatva Region. So, if in a month of 31 days there are 5 Thursdays, then the number of working days comes to 26, and if in a month of 30 days there are 5 Thursdays, then it shall be 25. It is never fixed at 26 or 30.

The link to the above-mentioned law is as follows:

[Calculation of Salary - Ministry of Manpower](http://www.mom.gov.sg/employment-practices/employment-rights-conditions/salary/Pages/calculation-salary.aspx)

Regards,
Dr. Urjit Kavi

Dr. Urjit Kavi has given the reference of the Singapore government, which can be different from Indian labor law. However, it is the most logical way of calculation, and we have been following this system for the past several years without any objections from our unions.

Regards

Salary Calculation Concept

The main concept for calculating salary is as follows: Gross salary / number of days in a month * worked days.

This formula is commonly used to determine an individual's salary based on their gross pay, the total number of days in a month, and the number of days they actually worked. By utilizing this calculation, employers can accurately calculate and allocate salaries for their employees.

As far as I know, in most companies, salary calculation is done as follows: Gross salary/monthly days * working days (including leave, weekly off, holiday). However, according to the law, salary should be calculated based on 26 days. This is because after working for 6 days, 1 rest day is mandatory.

Options for Calculating Salary

In conclusion, we have two options for calculating salary:
1. If we prepare the salary on a monthly basis, then we can use the standard of 30/31 days.
2. If we pay on a daily wages basis, then we have no choice but to calculate based on 26 days.

Thank you.

It is acknowledged that the link is from the Singapore Ministry, but the same regulations apply as per the Factories Act. The link was shared to clarify that such calculations need to be carried out.

Regards,
Dr. Urjit Kavi

I am still confused about salary calculation days. As noted in the notification of the Minimum Wages Act, the wages amount is fixed for 26 days, but we are calculating with 30/31 days. I request all of you to please clarify this matter and provide a solid reply.

Thank you.