LOP (Loss of Pay)

LOP arises in three ordinary ways: leave taken beyond the available balance, absence without an approved leave request, and unpaid leave taken deliberately, such as an extended personal break. In each case the day is recorded as worked-not-paid rather than simply removed from the record.

The deduction is normally the monthly gross divided by the number of days in the month, multiplied by the LOP days — though companies differ on whether the divisor is calendar days, working days, or a fixed twenty-six. That choice materially changes the deduction, and it is worth stating in the policy rather than leaving it to whoever runs payroll.

LOP also has consequences beyond the deduction itself. It reduces the wage on which provident fund is computed for that month, and a long run of it can affect gratuity's continuous-service test. Sandwiched holidays and weekly offs are a recurring argument: whether a weekend between two LOP days is itself unpaid depends on company policy, and reasonable policies differ.

For an HR team, the thing that makes LOP painful is not the arithmetic but the reconciliation — attendance, leave balance and payroll must agree before the run is finalised, and if they are three separate systems they usually do not.