Recently, we received a question from an HR manager, “Do we pay salary for the total number of calendar days in a month or only for the working days, after deducting the number of Sundays and other holidays in a month?”
Of course, organizations pay the same salary each month to an employee who works the entire month. The number of days for which salary is calculated in a month becomes relevant when an employee is paid only for a part of a month – in the first month of service, if the employee does not join the organization on the first day or in the last month of service, if the employee does not work until the last day of the month. The number of days for which salary is paid is relevant even in case of loss pay.
For example, if the monthly gross salary of an employee is Rs 30,000 and the employee joins an organization on 31st May, should his salary for May (for one day of work) be Rs 30,000/31 (calendar day basis) or should it be Rs 30,000/30 or Rs 30,000/26 (on a fixed number of days basis)?
If the monthly gross salary of an employee is Rs 30,000 and the employee has loss of pay for 2 days in May, should the loss of pay value be Rs (30,000/31) x 2 (calendar day basis) or should it be Rs (30,000/30) x 2 or Rs (30,000/26) x 2 (on a fixed number of days basis)?
The question, at a fundamental level, is: What should be the base days for salary calculation?
We find organizations in India adopting different bases for pay calculation.
