Employee Absence: Should We Deduct Only Basic Pay or Include Allowances Too?

Greetings all, please clear my doubt about employees' payment. If an employee is absent from work, while calculating their salary, do we deduct only their basic pay, or do we also make deductions in various allowances?

Thank you.

When the employee is absent, the entire salary for those days needs to be deducted. Therefore, along with Basic, you will have to reduce the salary for those days in all the salary components. Salary comprises not only Basic Salary but all the salary components together.

Regards,
Ashutosh Thakre

I agree with Ashutosh that all the salary components should be proportionately reduced based on the number of working days in a month.

Thanks for the reply. There was a discussion going on in the office that in some organizations, they make deductions from basic salary only and not from allowances such as HRA, conveyance, and other allowances.

Thanks for the reply. There was a discussion going on in the office about organizations that make deductions from basic salary only, not from allowances such as HRA, conveyance, and other allowances.

To those who discussed in your office that in some organizations only basic salary is deducted, ask them if an employee is on LWP/Absent for the entire month, will the employee receive all other salary components besides the salary? You will get a logical answer thereafter.

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