How to calculate Loss of Pay (LOP) for regular full time Employees?

Can someone please guide me on the calculation of Loss of pay (LOP) for regular full-time employees? Is it deducted from Net Salary or Gross Salary?

Ex: A is having -
Cost to company - 29,820,
Gross salary - 28,000,
PF by Employee - 1680
Professional Tax - 200
LOPs - 2

How the Net Salary should be calculated?

What is salary? Gross salary only. CTC is the cost of employing a person and that shall include the salary payable to him, additional amount payable to him as per law, ie, PF, ESI, Bonus etc. Net salary is the salary that he earns after deducting the contributions that an employee should contribute towards social welfare schemes like ESI, PF etc and the tax he is supposed to pay. Therefore, the gross salary will qualify for deduction of pay if he is absent on any day. In your case it should be on Rs 28000.

(I don't know how did you get Rs 29820 as CTC. If the employer's share of PFis similar to the one contributed by the employee, it should be Rs 1680 and as such the CTC should be Rs 29680. I believe you have included something else, like monthly element of bonus or gratuity...?)

Hello Sir,
The salary breakup for the same is below. And I have attached the Excel Sheet as well. Please guide me on where am I getting wrong in this.
Gross - 28,000
Basic - 14000
HRA - 7000
Conveyance - 1600
Medical allowance - 1250
Employee Contribution - 1680
Professional Tax - 200
Employer Contribution - 1680
EDLI 1% - 140
CTC(Gross+Employer Contribution+ESI) - 29820

Ok, you have taken EDLI and admin charges payable by the employer as part of CTC.

In your calculation sheet the number of days worked is missing. You should have separate columns for each component of salary with structured salary and earned salary. The structured salary is the salary as per structure and the earned salary is the structured component for the number of days worked. Then it will automatically calculate the LOPs and you will get the net salary after deduction of LOP.

DETAIL FIXED TOTAL PRESENT EARNINGS
DAYS DAYS
BASIC 14000 30 28 13067
HRA 7000 30 28 6533
CONV 1600 30 28 1493
MEDICAL 1250 30 28 1167
GROSS 23850 22260
PF 1680 1569
PT 200 200
NET PAY 21970 20491

In the given data PF contribution is not right. On the basis of Apex court verdict, PF Gross = Basic + Conv + Medical = 14000 +1600 +1250 = 16850/- and PF contribution should be on 16850/- pm. If the organization restrict it up to statutory limit, then it will be on 15,000/- pm.

Therefore the calculation made by Mr. H R Mohankumar, the PF gross portion will be on 15727 instead of 13067 after 2 days LOP. If the organization restrict to statutory limit it will be 15,000 as it is more than 15000. Therefore the PF Contribution will be 12% of 15000 = 1800/-.

S K Bandyopadhyay ( Howrah, WB)
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