Hi ppl,
I would like to know how the loss of pay is calculated for a person who has not served his notice period, for ex say... if the notice period is one month and the person has serverd a week. then how should you deduct from his salary
thanks,
Roopa
From India, Bangalore
18I would like to know how the loss of pay is calculated for a person who has not served his notice period, for ex say... if the notice period is one month and the person has serverd a week. then how should you deduct from his salary
thanks,
Roopa
From India, Bangalore
Dear Roopa,
Please refer to the employment letter being given to the ex employee whether deduction would be done on basic or gross salaary for the loss od days. Lets say is an employee has served 7 days notice while he was meant to serve a 30 day notice, you need to calculate the number of days he ahs not put in i.e 30-7=23 days, hence you would be deducting salary for 23 days either from his basic salary or his gross salary as agreed upon while recruiting him.
This calculations would be done as a part of his Full & Final settlement. Incase the amount can be deducted from his dues well and good or else you can send a notification to his next employers as well.
Please let me know incase you need to know more
Regards,
Sunaina
From India, Chandigarh
Please refer to the employment letter being given to the ex employee whether deduction would be done on basic or gross salaary for the loss od days. Lets say is an employee has served 7 days notice while he was meant to serve a 30 day notice, you need to calculate the number of days he ahs not put in i.e 30-7=23 days, hence you would be deducting salary for 23 days either from his basic salary or his gross salary as agreed upon while recruiting him.
This calculations would be done as a part of his Full & Final settlement. Incase the amount can be deducted from his dues well and good or else you can send a notification to his next employers as well.
Please let me know incase you need to know more
Regards,
Sunaina
From India, Chandigarh
Hey you missed out one point on full and final settlement you also take into consideration the PL leave into it. Regards, Derek
From India, Nagpur
From India, Nagpur
Just a point for you to note:
LOP or 'Loss Of Pay' has reference to 2 situations:-
1) When an existing employee takes a long leave eg: An employee may go on maternity leave and could cross the maternity leave limit. In these cases you need to have a clear policy that states that over and above the approved leave or the limit under a category of leave(such as Maternity Leave) the LOP will be based either on basic or on the full gross.
2) When there is shortfall in notice period,typically, the shortlfall will be adjusted in the FFS(Full and Final Settlement).In real terms, this is not LOP.Its technically called a shortfall in notice period that maybe adjusted.
Please note many companies make a an unfair mistake when it comes to adjustment of the shortfall and LOP,namely, they calculate these on the gross. However when it comes to leave encashment, they calculate it on basic. This is seen as an unfair practice towards employees.Please be aware of it an adopt a balanced view and a best practice.
Best wishes.
SK
From India, Bangalore
LOP or 'Loss Of Pay' has reference to 2 situations:-
1) When an existing employee takes a long leave eg: An employee may go on maternity leave and could cross the maternity leave limit. In these cases you need to have a clear policy that states that over and above the approved leave or the limit under a category of leave(such as Maternity Leave) the LOP will be based either on basic or on the full gross.
2) When there is shortfall in notice period,typically, the shortlfall will be adjusted in the FFS(Full and Final Settlement).In real terms, this is not LOP.Its technically called a shortfall in notice period that maybe adjusted.
Please note many companies make a an unfair mistake when it comes to adjustment of the shortfall and LOP,namely, they calculate these on the gross. However when it comes to leave encashment, they calculate it on basic. This is seen as an unfair practice towards employees.Please be aware of it an adopt a balanced view and a best practice.
Best wishes.
SK
From India, Bangalore
Dear Roopa
Providing u an example:
Name of the staff : ABC
DOJ
Basic 5000
H.R.A 2500
Convyeance 800
Speical Allowance 1000
EARnings (A) 9300
Medical 0
LTA 0
Earnings (B) 0
P.F 600
P.T 175
Total Deductions 775
Net Payable 8525
Dare of resignation 05/05/2007
Last Working Day 31/05/2007
Salary pending 8525
Leave Encashment 7750 25 Days
Total Payable 16275
Absence of Notice period 1240 4 Days
Total Receivable 1240
Net Payable 15035
In our company we calculate leave encashement on Earning A also deduction for notice period on the same thing..
Remeber one thing in mind..If the appointment letter states one month notice and you have served only say 26 days ten balance 4 days would be ur shortfall and it would be calculated like earnings A / 30 * 4(no of days u have served ur notice). and leave encasehment is also calculated on the same basis.. Earnings A / 30 * 25 ( no of days leave balance )
Hope it is clear to u
regards
AS
From India, Mumbai
Providing u an example:
Name of the staff : ABC
DOJ
Basic 5000
H.R.A 2500
Convyeance 800
Speical Allowance 1000
EARnings (A) 9300
Medical 0
LTA 0
Earnings (B) 0
P.F 600
P.T 175
Total Deductions 775
Net Payable 8525
Dare of resignation 05/05/2007
Last Working Day 31/05/2007
Salary pending 8525
Leave Encashment 7750 25 Days
Total Payable 16275
Absence of Notice period 1240 4 Days
Total Receivable 1240
Net Payable 15035
In our company we calculate leave encashement on Earning A also deduction for notice period on the same thing..
Remeber one thing in mind..If the appointment letter states one month notice and you have served only say 26 days ten balance 4 days would be ur shortfall and it would be calculated like earnings A / 30 * 4(no of days u have served ur notice). and leave encasehment is also calculated on the same basis.. Earnings A / 30 * 25 ( no of days leave balance )
Hope it is clear to u
regards
AS
From India, Mumbai
Please note that notice period on resignation could be adjusted against accumulated PL/EL. If it covers notice period dates no question of deducting salary in liue of insufficient notice period. If not, deduction for the days of short notice period from his GROSS salary not basic salary.
Suvajit
From India, Delhi
Suvajit
From India, Delhi
Dear Rope,
To calculate the loss of pay you need to know the notice period he or she is required to serve.
For eg: if an employee is supposed to serve 30 days notice and has served 7 days from the date of his resignation:
Eg: Basic is Rs.8600 then the calculation will be :
Basic *Notice period deduction/30
Notice period deduction is calculated - No: of days required to serve required to serve minus days actually served.
In this case it will 30-7 = 23
hence LOP will be 8600*23/30 = 6593
Assuming LOP is calculated on basic of salary .There are companies which calculate on Gross pay.
Hope i am able to clarify your doubts.
Pls free to contact if any queries.
rgds,
kavita
From India, Mumbai
To calculate the loss of pay you need to know the notice period he or she is required to serve.
For eg: if an employee is supposed to serve 30 days notice and has served 7 days from the date of his resignation:
Eg: Basic is Rs.8600 then the calculation will be :
Basic *Notice period deduction/30
Notice period deduction is calculated - No: of days required to serve required to serve minus days actually served.
In this case it will 30-7 = 23
hence LOP will be 8600*23/30 = 6593
Assuming LOP is calculated on basic of salary .There are companies which calculate on Gross pay.
Hope i am able to clarify your doubts.
Pls free to contact if any queries.
rgds,
kavita
From India, Mumbai
to add on to this...as i mentioned in another topic
in my offer letter they have mentioned a notice period of 30 days, but they haven't mentioned the consequences which the employee would face if he doesn't serve the notice period.... now my employer wants to deduct amount from my salary as shortage of notice period....can i fight back or should i just take the final settlement and walk out of the company????
what should i do in this case???
From India, Bangalore
in my offer letter they have mentioned a notice period of 30 days, but they haven't mentioned the consequences which the employee would face if he doesn't serve the notice period.... now my employer wants to deduct amount from my salary as shortage of notice period....can i fight back or should i just take the final settlement and walk out of the company????
what should i do in this case???
From India, Bangalore
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