Comprehensive Discussion on Monthly Salary Calculation and Leave Deductions

Dear All,

Please guide me on how to calculate the salary for each month in a year.

For example, in December, there are 31 days, and if I take 4 days of leave, how many days am I eligible to receive the monthly salary for: 26 days or 27 days? Is the calculation as follows:
- Monthly gross salary / 30 days * number of days present = net salary
or
- Monthly gross salary / 31 days * number of days present = net salary

Similarly, in February, there are 28 days, and if I take 2 days of leave, how should the calculation be done:
- Monthly gross salary / 30 days * number of days present = net salary
or
- Monthly gross salary / 28 days * number of days present = net salary

Similarly, in June, there are 30 days, and if I take 2 days of leave, should the calculation be as follows:
- Monthly gross salary / 30 days * number of days present = net salary
or what?

Which approach is correct in both cases?
Is the monthly wage/salary calculated based on the number of days in the month or on a fixed basis like 30 days for all months?

Awaiting prompt response from senior members.

Thank you.
Tarun

Hi,

I do not recollect the legal provisions on this right now as I handled this about 15 years back in two companies. For monthly-rated employees, we followed 30 as the common denominator for all months for the purpose of leave salary calculation. For workmen who were also monthly rated, we introduced 26 as the common denominator for the purpose of leave.

The only reason I remember as to why we followed 30 for staff was that they were eligible for more leave facilities. Prior to introducing this, we used to have lots of grievances on leave wages, and this set at rest all those grievances.

Siva

Hi Tarun,

If your leaves are approved and you are receiving the salary for the entire month, it will be shown as 30/31 days of work only. The number of days shown is based on the number of days in that particular month. For example, in February, the number of days becomes 28 only.

Regards,
Amit Seth

Hi Seniors,

Please put some more replies. I am not satisfied. Waiting for your intervention, please.

Thanks,
Tarun

Dear,

Salary is used for payroll employees, and wages are used for contractuals. Salary or wages can be calculated based on the number of days in the month. PF is calculated on the basic, ESI is calculated on the Gross Salary. Gross Salary minus Deductions (PF or ESI) equals Net Salary.

Please refer to the leave manual for your company. Payroll employees or contractuals should check which leaves are approved, such as sick/casual leaves, earned leaves/privileged leaves, maternity/paternity leaves. In some cases, these leaves are applicable after confirmation or from the date of joining, and they are approved by your immediate supervisor (excluding national holidays).

If you are paying them overtime, it can be calculated on gross as single and on basic as double.

Saurabh

Hi all,

I am still insisting on a more experienced reply as I have been fighting against my management for a long time. They have the practice of calculating based on 30 days for every month, claiming it is correct. However, in a year, the days are distributed as follows:
- 31 days in 7 months
- 30 days in 4 months
- 28/29 days in 1 month

If we consider 30 days for all the months, then 7 days are lost in payment for employees. Only 1 month has 2/1 day of additional payment, but ultimately, employees lose out on 5/6 days.

I kindly request senior members to understand and reply soon.

Thank you,
Tarun

Hi,

I am new to this site. As per my understanding, the rule is that we should consider 30 as a base for calculation for any month. Only in the case of daily wage workers, it is 26 days.

Rajeev

Hi Somdatta,

The CTC is equal to the gross salary.
CTC minus deductions equals the net salary.
Basic salary is 50% of the gross salary.

Thank you.

Dear All,

I am Sravanthi Narayan. I have gone through the information regarding salary calculation on a monthly basis. It was really helpful, but I kindly request all the seniors to give a detailed description of Gross Salary Calculation.

Waiting for your reply.

Sravanthi Narayan, HR Executive, Charter Global Pvt Ltd.

Dear All,

Please guide me on salary calculation for months in a year.

Suppose in Dec, there are 31 days, and I am taking leave for 4 days. How many days am I eligible to receive the monthly salary for Dec - 26 days or 27 days? Is it calculated as Monthly gross salary/30 days * no. of days present = net salary, or should it be Monthly gross salary/31 days * no. of days present = net salary?

Similarly, in Feb, there are 28 days, and I am taking leave for 2 days. How should the calculation be done? Is it like Monthly gross salary/30 days * no. of days present = net salary, or Monthly gross salary/28 days * no. of days present = net salary?

Similarly, in June, there are 30 days, and I am taking leave for 2 days. How should the calculation be done? Is it like Monthly gross salary/30 days * no. of days present = net salary, or something else?

Which method is correct?

Regards,
Daisy Prakash

It is also correct - but in my view, considering 26 days as the main calculation instead of basing it on 30 or 31 days. Keeping 26 as the standard and using it universally. Not including Sundays, but you will receive full salary for 26 days. The only difference is that the per day salary will be higher, i.e., salary / 26 * number of days present. Please check if possible for 30 days, the same amount will be received.

Regards,
SLG :)

Can anyone tell me what is the minimum limit of basic salary for PF deduction in Delhi NCR? Is there any circular or written document regarding this matter?

Hi, I am new to this site and I want to download a salary calculator. However, each time I try, I am asked to log in even though I am already registered with this site. Please help.

Monthly Gross Salary (MGS) = Annual Gross Salary (AGS)/12. Monthly gross salary = (MGS / Number of days in that month) * (Number of days in the month - Number of LWP (Leave without pay)).

Month with 30 days with 2 LWP (Leave without pay) = (MGS/30) * (30 - 2, i.e., 28). Month with 28 days with 2 LWP (Leave without pay) = (MGS/28) * 26. Month with 31 days with 2 LWP (Leave without pay) = (MGS/31) * 29.

Conclusion: The amount for LWP for February is greater than the amount for LWP for January. That's the standard calculation for all organizations.

Dear Seniors,

I am working as an HR in an IT company. As I am new to this industry, I would require your help in calculating salary structures for the staff. I would like to know about the components and how to calculate them.

Total CTC/ Annum: 300,000 (Yearly)

Basic: 40% of CTC - 120,000
DA: 10% of Basic - 12,000
HRA: 15% of Basic - 45,000
PF: 12% of Basic + DA - 5,280
Medical Allowance: 10,000 Fixed
Travel Allowance: 50,000 Fixed
Insurance: 25,000 Fixed
Special Allowance: 32,720
Gross Salary: 300,000

I am attaching a salary sheet for detailed calculation. It contains all the elements necessary to calculate an individual's salary.

Thank you.

Calculation is very simple. If it's a 30-day month, a person's actual working days are 22 days, and actual off-days are 04. See the below example.

For example: there are 22 days attendance + 4 days weekly off = 26 days. Say the monthly salary is 20000/- PM, then the calculation will be: 20000/30 X 26 = 17333.00. Similarly, a month of 31 or 28 days will be calculated as above.

This means: Monthly Salary / Actual Days of that Month X (Actual Working Days + Actual Off Days)