How to Calculate Salary from Attendance in India (2026)

Every month, the same question lands on the desk of thousands of Indian business owners and HR managers: how do I turn this attendance sheet into the exact salary each person should be paid? Get it wrong and you either overpay, underpay, or spend two frustrating days arguing over half-days and week-offs. Get it right and payroll becomes a ten-minute job.

This guide walks you through how to calculate salary from attendance in plain English — the 26-day rule, the calendar-day method, loss of pay (LOP), half-days, and overtime — with real worked examples you can copy for your own team. By the end you will be able to compute any employee's monthly pay from their attendance with confidence.

The one formula behind every salary calculation

Strip away the jargon and almost all monthly salary maths comes down to a single idea:

Monthly salary payable = (Per-day wage × Paid days) + Overtime − Loss of pay

Everything else — the 26-day rule, half-days, LOP — is just a different way of working out two numbers: your per-day wage and your paid days. So let's nail those two first.

Step 1: Decide how you calculate the per-day wage

There is no single legal rule that forces one method on every business in India, but there are two widely used approaches. You must choose one per employee, write it into the appointment letter, and stay consistent — switching methods month to month is how disputes start.

Method A — the fixed 26-day rule

This method assumes a month has 26 paid working days. The logic is that a worker gets four weekly offs (one per week), so 30 minus 4 gives roughly 26 paid days. Your per-day wage is simply:

Per-day wage = Monthly salary ÷ 26

This is common for factory workers, daily-wage staff, and anyone covered by minimum-wage notifications, because many state minimum wages are themselves fixed on a 26-day basis.

Method B — the calendar-day method

Here you divide by the actual number of days in the month — 28, 29, 30, or 31. Weekly offs are treated as paid, so a full-month employee simply gets their full salary:

Per-day wage = Monthly salary ÷ Days in the month

This is popular for salaried office staff. It has one quirk: the per-day value is slightly higher in February and slightly lower in a 31-day month, so a single day of LOP costs a little more in a short month.

Step 2: Count the paid days from attendance

Your paid days are not the same as "days present." Paid days usually include:

1. Days actually worked (a clean punch-in and punch-out).
2. Paid weekly offs — if you use the calendar-day method.
3. Paid holidays — national and festival holidays your business observes.
4. Approved paid leave — casual leave, earned leave, or sick leave that the employee is entitled to.

Unpaid absences, unapproved leave, and days beyond the leave balance are not paid — they become loss of pay, which we handle in Step 4.

Worked example: a simple full-attendance month

Take an employee, Priya, on a monthly salary of ₹18,200 in a 30-day month. She was present every working day and took no unpaid leave.

• 26-day method: Per-day = ₹18,200 ÷ 26 = ₹700. Priya worked all 26 paid days, so salary = ₹700 × 26 = ₹18,200.
• Calendar method: Per-day = ₹18,200 ÷ 30 = ₹606.67. She is paid for all 30 days, so salary = ₹606.67 × 30 = ₹18,200.

When attendance is perfect, both methods land on the full salary. The difference only shows up when someone is absent — which is where most manual errors creep in.

Step 3: Handle half-days correctly

A half-day counts as 0.5 of a working day. If an employee works only half a shift or takes an unpaid half-day, you pay (or deduct) half the per-day wage. Using Priya's ₹700 per-day rate on the 26-day method, one unpaid half-day costs ₹350.

The tricky part in real life is deciding what counts as a half-day. Is it fewer than four hours worked? Arriving after 11 am? This is where clear punch-in and punch-out times matter — a system that records exact timings can flag a half-day automatically based on the hours-worked rule you set, instead of leaving it to memory or a supervisor's judgement.

Step 4: Calculate loss of pay (LOP) for unpaid absences

Loss of pay is the amount you deduct for days an employee was absent without paid leave to cover it. The formula is straightforward:

LOP = Per-day wage × Number of unpaid absent days

Let's extend the example. Suppose Priya (₹18,200/month, 26-day method, ₹700 per day) had 2 unpaid absent days and 1 unpaid half-day in the month:

• Full unpaid days: 2 × ₹700 = ₹1,400
• Unpaid half-day: 0.5 × ₹700 = ₹350
• Total LOP = ₹1,750
• Salary payable = ₹18,200 − ₹1,750 = ₹16,450

Notice how the per-day rate you chose in Step 1 flows through every deduction. That is why consistency matters so much: change the divisor and every LOP figure changes with it.

Step 5: Add overtime the legal way

If your workers put in extra hours, overtime is not optional goodwill — for establishments covered by the Factories Act, overtime must be paid at twice the ordinary rate of wages for hours worked beyond the daily or weekly limit. The maths:

1. Ordinary hourly rate = Daily wage ÷ Normal hours in a shift. For Priya at ₹700/day on an 8-hour shift, that is ₹700 ÷ 8 = ₹87.50 per hour.
2. Overtime hourly rate = Ordinary rate × 2 = ₹175 per hour.
3. Overtime pay = Overtime rate × extra hours. If Priya worked 6 extra hours, that is ₹175 × 6 = ₹1,050.

Add this on top of her monthly salary after LOP. Overtime rules vary by state and by which labour law your business falls under, so always confirm the exact limit and rate that applies to you — but the double-rate principle is the common baseline.

Putting it all together: a full monthly example

Here is Priya's complete month in one table, using the 26-day method and a ₹700 per-day wage:

From this gross figure you would then apply statutory deductions such as PF and ESI where applicable, plus any advances, to reach the final take-home pay. But the attendance-driven part — the part that eats your time every month — is done.

Where salary calculations go wrong (and how to avoid it)

Most payroll errors are not maths mistakes; they are attendance mistakes. The formula is easy — the data feeding it is where things break:

• Missed or double punches that make a present day look absent, or vice versa.
• Buddy punching, where a friend marks an absent colleague present, quietly inflating paid days.
• Guesswork on half-days because nobody recorded the actual in/out time.
• Mixed methods — using 26 days one month and 30 the next for the same person.
• Manual re-typing from a register into Excel, where a single wrong cell throws off the whole sheet.

Clean, tamper-proof attendance is the foundation. If the raw punch data is right, the salary is almost impossible to get wrong.

Letting software do the calculation for you

Once you understand the formula, you can see why doing it by hand for twenty or fifty people is such a chore — and so error-prone. This is exactly the problem tools like LogLinkr are built to solve. Because employees punch in with face recognition on an ordinary Android phone, every present day, half-day and overtime hour is captured accurately and can't be faked by a colleague.

From that clean attendance, LogLinkr runs automatic payroll — it applies your chosen per-day method, counts paid days, deducts LOP, adds overtime, and produces each person's salary without a single Excel formula. It can then send every employee their payslip on WhatsApp, so there are no printouts and no month-end "how did you get this number?" arguments. If you're weighing up the attendance side first, our complete guide to face recognition attendance is a good next read.

Plans start at ₹99/month for up to 50 employees (launch offer; regular ₹199), with a ₹399/month plan covering up to 200 — prices exclude 18% GST — and there is a 45-day free trial with no credit card. You can see the full pricing here.

The salary formula takes five minutes to learn. The real time drain is counting attendance correctly for every person, every month — solve that, and payroll almost calculates itself.

Frequently asked questions