How Loss of Pay (LOP) is calculated
Loss of Pay converts unexcused absences and approved unpaid leave into LOP days. Payroll then prorates the month's salary components by paid days — (month days minus LOP days) divided by month days — so gross, and every statutory deduction computed from it, reflects the days actually worked.
From attendance to LOP days
LOP days = absent days without approved paid leave, plus approved leave taken without balance (unpaid leave). Accurate LOP therefore depends on attendance capture and leave records agreeing — which is why they belong in one system.
Proration touches everything downstream
Once earnings are prorated, EPF, ESI eligibility, PT slab selection and TDS projection all follow the prorated figures. A single missed LOP day quietly distorts four statutory calculations — the reason manual LOP tracking is the most common payroll error source.
How Flocci Work Suite does it
The LOP engine derives deduction days from attendance logs and unpaid leave automatically, and the payroll run prorates each component by paid days before the statutory engines execute. The AI QA audit then flags unusual net-pay swings before finalization.
Frequently asked questions
- What counts as an LOP day?
- An absent day not covered by approved paid leave, or an approved leave day taken without sufficient balance (unpaid leave).
- Does LOP affect PF and ESI?
- Yes — statutory contributions are computed on the prorated pay, so LOP reduces the wage base they apply to and can even change ESI eligibility for the month.
- Can LOP be reversed after payroll?
- Best practice is to correct it before finalization — Flocci locks finalized runs; subsequent corrections are handled as adjustments in a later run (arrears support is in rollout).
Keep reading
Statutory rules summarized as of 2026-07-29. Rates and thresholds change — always confirm against the current EPFO, ESIC and Income Tax department notifications before filing.