Loss of Pay (LOP) Calculator

Updated August 2026 · Free · No sign-up

Calculate loss of pay (LOP) deductions — the salary cut for unpaid leave days in Indian payroll: per-day salary basis, LOP amount, and the reversal math when leave gets regularised.

The Formula (and the Divisor Question)

LOP = Per-day Salary × LOP Days, where per-day salary = monthly gross ÷ divisor. The divisor is pure company policy and changes your money:

Working-days divisors produce bigger deductions per LOP day — know which one your payroll uses before assuming an amount.

What LOP Hits Beyond Gross

• PF: employer and employee PF contributions compute on LOP-reduced basic — a month of heavy LOP dents retirement savings too.
• Components: most companies deduct LOP proportionally across basic, HRA, and allowances; some deduct from basic only (check — it changes the PF and tax math).
• Leave accrual and gratuity service: extended LOP stretches can pause leave accrual and, past thresholds, affect continuous-service counts.
• Tax silver lining: lower gross = lower TDS that month; payroll adjusts automatically.

LOP Reversal (Regularisation)

Applied leave gets approved late, or a missed punch gets corrected → the deducted amount returns as LOP reversal in a subsequent payslip, recomputed on the same divisor. Reversal appearing as a separate earnings line is normal; verify it equals the original deduction and that PF re-credits followed.

When LOP Happens (and How To Avoid It)

1. Leave balance exhausted: absence beyond earned/casual/sick balances converts to LOP — track balances with the leave balance calculator.
2. Unapproved absence: even with balance available, absence without approval books as LOP in most HRMS systems until regularised.
3. Missed punches/timesheets: the silent LOP generator — regularise within the window (usually 2-5 days) or lose real money.
4. Notice period shortfall: unserved notice days often recover as LOP-equivalent deductions in the FnF settlement.
5. Sandwich policies: some companies count intervening weekends/holidays as LOP when flanked by LOP days — a 2-day Friday-Monday absence becoming 4 LOP days. Check the policy; it's legal and common.

LOP vs Leave Encashment (The Symmetry)

LOP prices your absence at per-day salary; encashment prices your unused leave at (usually) per-day basic. The asymmetry — LOP often deducts on gross, encashment often pays on basic — is why burning earned leave beats taking LOP in nearly every case where you have balance available.

For HR/Payroll Teams

Publish the divisor policy explicitly (calendar vs 30 vs working days), apply it uniformly across deduction and reversal, and cap sandwich rules clearly — LOP disputes are the highest-volume payroll ticket category in Indian companies, and nearly all of them are divisor or sandwich-rule surprises.

✓ Formula verified  •  Last updated: August 20, 2026