Step 1: classify every day
Each day of the month is one of: present, half day, paid leave (casual, sick, earned and so on), weekly off or holiday, unpaid leave, or absent. Half days and fractional leave count as fractions. Only approved leave counts as leave — a pending request does not protect a day.
Step 2: payable days and LOP days
Payable days are the days paid: present days, paid leave, and paid weekly offs and holidays. LOP days are the days employed in the month minus the payable days. Someone who joins or leaves mid-month is employed for only part of it, which is a separate reduction from LOP.
Step 3: prorate the salary
Each component is reduced in proportion to the days paid. What the proportion is measured against is a policy choice. Common conventions divide by the calendar days in the month, by a fixed 30 or 26 days, or by working days — so a day's pay differs between them.
Not every component should be prorated. A fixed reimbursement is usually paid in full; some allowances are paid only for a complete month.
A worked example
An illustrative September (30 days), a monthly salary of ₹30,000 set to prorate, and 2 days of unpaid leave:
- Days employed: 30. Payable days: 28. LOP days: 2.
- Prorated salary on calendar days: 30,000 × 28 ÷ 30 = ₹28,000.
- The same 2 days in February (28 days) cost more: 30,000 × 26 ÷ 28 = ₹27,857.14 — a day in a short month is worth more.
How HRMSMax does it
- Every day comes from the attendance record, with approved leave already applied, and each day's status carries its reason. A day with no attendance record is not paid.
- LOP days are days employed minus payable days, including fractions.
- Payroll prorates part months on the calendar days of the month.
- Each component is set to reduce for unpaid days, always pay in full, or pay only when the whole month is paid; the payslip says when a component was not paid and why.
- If attendance for a month changes after its payroll is frozen, the difference becomes an adjustment in a later payroll.
Questions
What is LOP in salary?
Loss of pay: the reduction in salary for days the employee was employed but not paid for, such as unpaid leave or unapproved absence.
Is a weekly off counted as an LOP day?
Normally a weekly off is a paid day. Some companies apply a sandwich rule, counting offs between two leave or absent days as leave; in HRMSMax that is an optional setting.
Does HRMSMax divide by 30 or by calendar days?
HRMSMax payroll prorates part months on the calendar days of the month — 28, 29, 30 or 31.