In the case of Leave Without Pay (LOP), should the salary deduction be applied to the basic salary component, or should it be deducted from the gross salary?
From India, Hyderabad
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From India, Hyderabad
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The calculation of salary deduction for Leave Without Pay (LOP) depends on the company's policy and the labor laws of the country. In India, the standard practice is to calculate the deduction based on the gross salary.
The gross salary includes all allowances, benefits, and bonuses in addition to the basic salary. Therefore, when an employee takes a leave without pay, the deduction is made from the total earnings that the employee would have received if they had worked, which is the gross salary.
However, it's important to note that this may vary depending on the company's internal policies and the specific terms of the employment contract. Therefore, it would be advisable to check the company's leave policy or consult with the HR department for clarification.
Remember, it's essential to ensure that the deduction is made in compliance with the labor laws to avoid any legal issues. In India, you can refer to the Shops and Establishment Act of your specific state (in this case, Telangana, as you're based in Hyderabad) for more details.
In conclusion, while the general practice is to deduct from the gross salary for LOP, it's always best to confirm with your HR department or refer to your employment contract to understand how it's applied in your specific case.
From India, Gurugram
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105The gross salary includes all allowances, benefits, and bonuses in addition to the basic salary. Therefore, when an employee takes a leave without pay, the deduction is made from the total earnings that the employee would have received if they had worked, which is the gross salary.
However, it's important to note that this may vary depending on the company's internal policies and the specific terms of the employment contract. Therefore, it would be advisable to check the company's leave policy or consult with the HR department for clarification.
Remember, it's essential to ensure that the deduction is made in compliance with the labor laws to avoid any legal issues. In India, you can refer to the Shops and Establishment Act of your specific state (in this case, Telangana, as you're based in Hyderabad) for more details.
In conclusion, while the general practice is to deduct from the gross salary for LOP, it's always best to confirm with your HR department or refer to your employment contract to understand how it's applied in your specific case.
From India, Gurugram
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As far as public servants governed by service laws, some allowances such as house rent allowances are unaffected during leave without pay unless the leave period is prolonged.
From India, Kochi
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From India, Kochi
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(Fact Checked)-Your input is correct for public servants. For private sector, it's based on company policy. Keep contributing! (1 Acknowledge point)
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Under normal circumstance and under the present salary structure, the gross salary will qualify for proportionate deduction for leave without pay. But in a proper pay scales which is being followed in PSUs, where PAY is different from ALLOWANCES, the LOP will be deducted from the PAY where PAY means basic pay and dearness allowances only. In private establishments, however, the basic pay is just a component of 'emolument' like allowances, ie, house rent allowance, conveyance allowance etc. In order to test whether your allowances also qualify for proportionate deduction when there is a loss of pay leave, you have to go through the terms and conditions of employment. That is, if you have given an allowance, say HRA, to all employees without asking them whether they reside in their own house or leased house, then the HRA is part of salary only. If the employees are getting conveyance allowance without reference to kilometre travelled to reach office, the same is a part of salary. Then in such situation, you should take the entire components as salary and that gross salary should be taken as base for deduction for leave without pay.
Coming to a scenario that you have fixed salary and in addition to salary you have offered some allowances like HRA, conveyance or petrol allowance, education allowance, hill allowance, heat allowance etc and these allowances are payable on actuals or with a ceiling to those who reside in leased houses, uses their own vehicles to commute to office, having children receiving education, posted in hilly areas or engaged in the functions wherein they have to face a lot of heat etc, then these allowances will be totally excluded from the salary and no pro rata deduction will be made on these allowances. Heat allowance, of course, is paid for the days the employee has physically worked in the factory.
From India, Kannur
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Coming to a scenario that you have fixed salary and in addition to salary you have offered some allowances like HRA, conveyance or petrol allowance, education allowance, hill allowance, heat allowance etc and these allowances are payable on actuals or with a ceiling to those who reside in leased houses, uses their own vehicles to commute to office, having children receiving education, posted in hilly areas or engaged in the functions wherein they have to face a lot of heat etc, then these allowances will be totally excluded from the salary and no pro rata deduction will be made on these allowances. Heat allowance, of course, is paid for the days the employee has physically worked in the factory.
From India, Kannur
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(Fact Checked)-Your explanation is accurate and well-detailed. It indeed depends on the terms and conditions of employment and the nature of allowances. Good job! (1 Acknowledge point)
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(Fact Checked)-Your information is accurate as per the Payment of Wages Act, 1936. The deduction for Leave Without Pay is from the gross salary. Keep up the good work! (1 Acknowledge point)