What is Loss of Pay (LOP)?
Loss of Pay (LOP), also called Loss of Payment, is the salary deduction made when an employee takes leave without having sufficient leave balance. LOP is calculated based on the employee’s per-day salary.
If an employee skips work on both a scheduled workday and a compensatory weekend or strike day, it results in a loss of salary. Similarly, working on weekends due to inefficiency or lack of supervision can also count as LOP.
Factors That Contribute to LOP
- Employment Contract: Some companies consider annual salary for LOP calculations, depending on the employment terms.
- Nature of Work: Essential and high-risk roles may have different rules for LOP deductions.
- Pay Scale: Senior-level employees may not be subject to LOP in some cases.
- Company’s Decision: Extended sick leave, poor attendance, or unsatisfactory performance can lead to LOP based on company policy.
How to Calculate Loss of Pay?
 The formula for LOP calculation is as follows:
LOP = One-day effective salary × Number of leave days taken
One-day effective salary = Total monthly salary ÷ Total days in the month
Example Calculation:
- Monthly salary = ₹90,000
- Days in the month = 30
- One-day salary = ₹90,000 ÷ 30 = ₹3,000
If weekends are excluded:
- Working days = 22 (30 – 8 weekends)
- One-day salary = ₹90,000 ÷ 22 = ₹4,090
Common Causes of LOP
- Illness or Injury
Unplanned sickness or accidents can lead to loss of pay if there’s no leave balance. - Unauthorized Absences
Taking leave without approval can result in LOP. It can also impact morale and lead to legal complications. - Other Reasons
Family emergencies, doctor visits, or personal tasks without leave approval may result in loss of salary.
How to Avoid LOP in Your Salary Slip?
- Plan Your Leave in Advance
Inform your manager or HR early about your leave. It helps them manage schedules and avoid LOP on your payslip. - Compensate for Lost Time
Work extra hours or on weekends to make up for unplanned leave. This can reduce the impact of LOP on your salary. - Track Your Leave Balance
Regularly check your leave balance. Use available leaves wisely to avoid unnecessary deductions. - Avoid Unnecessary Leaves
Only take leave when required. Managing your leave properly ensures minimal salary loss.
By understanding LOP and following these tips, you can effectively manage your attendance and avoid deductions in your salary slip.
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