Salary Calculation Dilemma: How to Pay an Employee Who Worked 16 Days in a 31-Day Month?

Hi experts,

Our company follows a 30-day base for calculating monthly salaries. I have a situation where an employee was absent for 15 days and worked for 16 days in a 31-day month.

The question is, for how many days should we make the payment:
a) 30 - 15 (absent) = 15 days
or
b) 16 days as he worked

Please advise on the correct calculation method. Thank you.

Dear Kishore, Different calendars have a different number of days for a calendar month, though there is uniformity in the number of months in a year. According to the Solar Calendar, a regular year has 365 days, so a month has 30.42 days (365/12), and a Leap year has 30.50 days (366/12). The Gregorian Calendar has 30.44 days in a month (365.2425/12).

As you know, there are 7 months having 31 days, 4 months having 30 days, and one month, namely February, alternates between 28 and 29 days once every four years. Therefore, the universal presumption for the sake of calculation is that a month normally comprises 30 days only.

When wages/salary of employees are calculated on a daily rate basis, there is no problem as only the days worked are taken into account for the purpose. However, when the compensation package is based on a monthly basis, the difference in the days of months does not matter as far as the whole year is concerned. Yet the difficulty, such as the one you have mentioned, arises only when there is part attendance entitling salary/wages to the employee concerned and part absence in a given month entitling no wages at all.

In such a situation, based on the practice followed in Central and State Government Departments, the monthly wages/salary has to be divided by the actual number of days in the particular month to arrive at the daily rate.

What about the paid weekly off days in your organization? If there are any, the monthly salary should be divided by the total days minus the weekly off days. Please inform.

Monthly-Rated Employees: Salary Calculation

In the case of monthly-rated employees, the base for wage/salary calculation per day will pertain to the number of calendar days in that particular month. For months like January, March, May, July, August, October, and December, the calculation should be divided by 31. For February, it should be divided by 28 or 29 depending on leap years, and for April, June, September, or November, it should be divided by 30 as applicable. I believe this method would be a fair way of calculating the daily rate of wages/salary.

Daily-Rated Employees: Salary Calculation

Regarding daily-rated employees, it is advisable to follow the guidelines outlined in the Minimum Wages Act, where the monthly wages are divided by 26 days. This approach should be deemed appropriate and compliant with the relevant laws and regulations.

Kind regards

According to any act, there is nothing mentioned about the number of days calculation if the candidate joins or is absent, where the calculation is on a pro-rata basis. There is nothing mentioned. Maximum number of organizations take the number of days as per the days in a month.

Paid Weekly Off Days in Organizations

Your question: What about the paid weekly off days in your organization? If there are, the monthly salary should be divided by total days minus weekly off days.

Answer: To my understanding, yes, weekly offs are considered. Why are you subtracting weekly offs again? Anyways, these are entitled in all your days. For example, out of 30 days, if an employee has worked for 15 days (including weekly offs), you pay him for 15 days. He cannot claim the remaining weekly offs for which he hasn't worked.

Pro-rata Basis for Leaves

Also to note: If your organization follows a pro-rata basis for leaves, that means 2 leaves accumulate when you complete 1 month. The keyword here is "complete." If that's the policy, then two leaves won't be considered.

Per day calculation for the whole month is the best option available.

E.g. 16000/30 = 533.33

533.33 * 16 = 8533.33

I know one organization (MNC) following a different way to deal with monthly paid staff as mentioned below. It appears logical.

Daily wages are arrived at by (Monthly wage x 12) / 365. Loss of pay (LOP) in any month is determined by the number of days LOP x Daily wage. Gross salary will be (Monthly salary - LOP).

S K Bandyopadhyay (Howrah, WB)

USD HR Solutions

As per statutory compliance, we consider actual working days excluding weekly offs as the factor for calculating per day salary. For example, if a month has 30 days and 4 weekly offs, then the workdays in the month are 26. Therefore, the Monthly salary divided by 26 days would be the per day salary. If an employee is called to work on a weekly off or a holiday, it amounts to overtime and should be paid at double the rate of the per day value. This allows us to satisfy the statutory obligations correctly.

A very simple calculation states here that if a person has worked for a number of days, that person should be paid according to their one-day salary. Following this logic, the person should receive 16 days' worth of salary as they were present for 16 days. It is also important to note that it doesn't matter if the month has 30 or 31 days since the person was absent on the remaining days.

Dear Kishor,

I think if the salary is paid on a monthly basis, then there should not be an issue with calculations. However, you have to divide the gross salary by the number of days in a month and multiply by the PR days.

Thanks.

Regards,
Nilesh

When you are following a uniform 30 days per month, pro-rata salary will be calculated as: Gross Salary - (Absent days x Daily salary)

Gross salary = Rs. 45,000 Daily Salary = Rs. 1,500

June July Present 14 14 Absent 16 17 Loss of pay 24,000 25,500 Salary payable 21,000 19,500

Dear Kishore,

To calculate monthly basis salary:
For example, if an employee's salary is 15000/- per month,
15000 / Monthly Days * Total Present days (Including Week Off, NH, Leave, etc).

15000
-----------------
X Total Present days
Monthly Days

Thank you.

Hello Mr. Kishore, I believe this is not the correct way to calculate salary. If this situation occurs in the month of February, the company does not inquire about it. In such cases, the company directly deducts the salary for 15 days out of 28 days and processes payment for 13 days. This results in a loss for the employee. Therefore, if you adhere to this process, you should pay for 16 days of salary or divide the salary by 31 days and pay for 16 days.

Example: If an employee's salary is 10,000
10,000/30 = 333/day
16 days = 5,328
10,000/31 = 322/day
16 days = 5,072

Thank you.

Salary calculations will be made based on the days falling within that specific month. For example, if the salary is $10,000 and the month is January, the calculation will be as follows: Salary = $10,000 / 31 * number of payable days.

The concept of "30 days" is just to receive daily or one-day wages, which are payable based on the number of payable days. For example, 16 days multiplied by the daily wage (monthly wage divided by 30) would be applied.