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What is Loss of Pay (LOP) and how is it calculated?
Loss of Pay (LOP) is the salary deducted for days an employee was absent without paid leave. LOP amount = monthly salary ÷ days in the pay basis × number of LOP days.
Last updated . Rates and limits change, so verify against the official sources below.
What is Loss of Pay?
Loss of Pay means the employee is not paid for a day. It usually applies when an employee is absent and has no approved paid leave to cover the day, or has used up the leave balance.
LOP is a payroll term, not a statutory rate. Your company policy and employment contract decide when it applies.
How is LOP calculated?
First find the per-day salary: monthly salary divided by the days basis. Then multiply by the number of LOP days. Subtract the result from the monthly salary.
- Per-day salary = monthly salary ÷ days basis.
- LOP deduction = per-day salary × LOP days.
- Pay after LOP = monthly salary − LOP deduction.
Which days basis should be used?
Companies use different bases: the calendar days of the month (28 to 31), a fixed 30, or working days (such as 26). The choice changes the per-day amount, so write it into the policy and apply it the same way for everyone.
| Days basis | Per-day salary | LOP deduction | Pay after LOP |
|---|---|---|---|
| 30 days | ₹1,000 | ₹2,000 | ₹28,000 |
| 26 days | ₹1,154 | ₹2,308 | ₹27,692 |
Which days count as LOP?
Common rules, subject to your policy: absent days with no approved leave, leave taken after the balance is zero, and days under unapproved leave. Weekly offs and public holidays are normally not LOP. A half day can be counted as half a LOP day.
How does attendance feed LOP in an HRMS?
The month’s attendance records are compared with approved leave, holidays and weekly offs. Days marked absent that no approved leave covers become LOP days, and the payroll run uses the count to reduce pay.
In Lumos HRMS, payroll reads the attendance and leave records for the month, so a regularised punch or an approved leave request changes the LOP count before the payroll is approved. Attendance rules such as excess early leaves can also be set to count as LOP.
A full worked example
Priya earns ₹30,000 a month. In a 30-day month she was absent for 3 days with no leave balance, and took 1 approved paid leave day.
- Only the 3 unapproved absent days are LOP. The approved paid leave day is paid.
- Per-day salary on a 30-day basis = 30,000 ÷ 30 = ₹1,000.
- LOP deduction = 1,000 × 3 = ₹3,000, so pay after LOP = ₹27,000 before other deductions.
Common mistakes to avoid
Switching the days basis from month to month, counting weekly offs and holidays as LOP, deducting LOP twice (once from salary and once from leave balance), and not telling employees about LOP before payroll is final. Show LOP days on the payslip so the deduction can be checked.
Does LOP affect PF and ESI?
Usually yes. Statutory deductions are worked on the wages actually earned in the month, so PF and ESI are normally calculated after LOP. Check how your policy and the current rules treat it.
Frequently asked questions
Is LOP the same as unpaid leave?
They are close. Unpaid leave is approved leave without pay; LOP also covers unapproved absence. Both reduce the salary for that day.
Is LOP calculated on basic or gross?
It depends on the company policy. Many companies use gross monthly salary; some use basic only. Apply the same basis for every employee.
Can an employee avoid LOP by regularising attendance?
If the missed punch is corrected and approved before payroll is processed, the day is no longer counted as absent.
Sources
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