Loss of pay, and the divisor you must not change
A deduction for absence without balance — where the per-day rate depends on a divisor that has to be the same for everyone, every month.
What it is
A deduction for days absent with no leave balance available.
The rate
Gross or basic divided by the days in the month, or a fixed 26 or 30 — as your policy states.
The trap
Switching the divisor between months. Nothing erodes trust in payroll faster.
Loss of pay is the deduction for days absent without an available leave balance. The per-day rate is usually gross or basic divided by the days in the month or a fixed 26 or 30 — whichever the company policy states — multiplied by the LOP days.
How it works in practice
Three LOP days on ₹26,000 gross with a 26-day divisor deducts ₹3,000.
What to watch for
The divisor must be consistent. Switching between 26 and 30 depending on the month is the fastest way to lose employee trust in payroll.
How Klok handles it
Klok applies one configured divisor for everyone and shows LOP days on the payslip.
Loss of pay (LOP) FAQs
Should the divisor be 26, 30 or the actual days?
Any of them can be defended; what cannot be defended is varying it. A fixed 26 suits establishments with a six-day week; actual days suits a monthly-rated office. Pick one, write it down, apply it to everyone.
Does LOP affect PF and ESI?
Yes — it reduces the wages for the month, and therefore the contributions computed on them. It also reduces the days worked reported in the ECR, which must agree with the register.
Can LOP be applied to a notice period?
Absence during notice is still absence, so yes. Whether it also extends the last working day is a separate question your policy should answer explicitly.
Which divisor do we use to value a day?
That is a policy decision — calendar days, working days, or a fixed figure — and it must be stated and stable. Changing it between months, or between employees, is indefensible even when each individual choice is arguable.
Does loss of pay affect statutory contributions?
It reduces the wage base, so contributions move with it. Deducting pay while contributing on the full salary is a mismatch that shows up at reconciliation.
Does LOP affect leave accrual or gratuity service?
It can affect accrual and, if prolonged, continuous service. A few days will not; a long unpaid break needs checking rather than assuming.
Stop calculating this by hand
Klok computes it from your own attendance and salary data, every month, with the working shown.