Loss of Pay (LOP)
Last updated: 13 July 2026. General explainer, not legal or tax advice.
At a glance
How loss of pay is applied
Loss of pay, or LOP, is a deduction for days an employee is absent without enough paid leave to cover them. When someone takes more days off than their available leave, the extra days become loss of pay. Payroll works out a per day value from the monthly salary and removes that amount for each LOP day, so net pay for the month falls.
How the per day value is set
The per day figure is the monthly salary divided by a base number of days. Some companies use calendar days, others use working days, and the choice changes the size of each deduction. Whatever the base, it should be stated in policy and applied the same way for everyone, so LOP does not feel arbitrary.
Loss of pay and the records behind it
LOP depends entirely on accurate attendance and leave balances. If leave is recorded late, or a present day is marked absent, the deduction is wrong. Correcting the attendance through a regularisation before the payroll cutoff is what keeps the pay right and avoids a reversal next month.
The knock on effects
Because loss of pay reduces the earned wage for the month, the deductions that ride on wages, such as provident fund, are worked on the lower figure for that month. So a few LOP days change more than one line on the payslip.
Loss of pay, unpaid leave and half days
Loss of pay usually shows up as full days, but the same idea covers part days. A half day of unapproved absence is half a day of loss of pay, and a late mark policy, where a company runs one, works the same way on a smaller scale. The label on the payslip may read loss of pay or unpaid leave, but the effect on the wage is the same.
Clarity in policy prevents most arguments here. Stating how half days are treated, how late marks convert, and what counts as unpaid absence means the deduction is understood in advance rather than contested after the payslip.
Worked example
An employee on 30,000 rupees a month has no leave left and misses two days. If the per day value is about 1,000 rupees, the loss of pay is around 2,000 rupees. Net pay for the month drops by that amount, and the wage that provident fund is worked on falls slightly too.
Related terms
Frequently asked questions
What does loss of pay mean on a payslip?
A deduction for days you were absent without enough paid leave to cover them. Those days are removed from your salary for that month.
How is loss of pay calculated?
Payroll takes a per day value of your monthly salary, using calendar or working days per policy, and deducts it for each LOP day.
Can loss of pay be reversed?
If the absence was actually covered by leave, or was a marking error, correcting the attendance or leave record removes the LOP in the next run.
Does loss of pay affect PF?
Yes. Because it lowers the earned wage for the month, the provident fund for that month is worked on the reduced figure.
How do I avoid loss of pay?
Apply leave against an available balance, or regularise a genuine but wrongly marked day before the payroll cutoff.
Does loss of pay apply to half days?
Yes. A half day of unapproved absence is half a day of loss of pay. The same idea scales down from full days.
What is the difference between loss of pay and unpaid leave?
Little in effect, both reduce the wage for days not covered by paid leave. The payslip label may differ, but the deduction works the same way.
Sources and official references
The rules and figures on this page trace to the official sources below. Statutory amounts and dates change, so confirm the current number on the source before you act on it.
How Offrd helps
Offrd links attendance and leave to payroll, so loss of pay reflects what actually happened, not a guess.