Zoho Payroll supports two LOP calculation methods: calendar day basis (salary divided by total calendar days in the month) and working day basis (salary divided by total working days including Sundays). The method is configured in payroll settings. For example, with calendar days in a 30-day month, one LOP day = 1/30 of monthly salary. This affects all salary components proportionally.
LOP reduces gross salary first, and statutory deductions are then computed on the reduced gross. This means PF, ESI, and PT are calculated on the post-LOP gross. For ESI, if LOP brings gross below Rs 21,000, the employee may become ESI-eligible for that month. Zoho Payroll handles this edge case automatically.
If Zoho Payroll is integrated with Zoho People (HRMS), leave data flows automatically. Unapproved absences or days exceeding the leave balance trigger LOP in the pay run. The payroll admin sees LOP days pre-populated from attendance data and can review or adjust before finalising. This integration eliminates manual entry of LOP.
LOP (Loss of Pay) is a proportional salary deduction applied in Zoho Payroll when an employee is absent without sufficient leave balance. The deduction reduces gross salary for each unpaid day, and all statutory deductions (PF, ESI, PT, TDS) are then computed on the lower gross.
Zoho Payroll divides the monthly gross salary by the number of days in the pay period (calendar or working days, as configured) and multiplies by the number of LOP days. The result is deducted from gross salary before any other calculations. Admins can review and adjust LOP days in the draft pay run.
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