To calculate salary from attendance: (1) fix the per-day rate, usually monthly salary divided by the days in the month (or by a fixed number such as 26 if your policy says so); (2) count paid days, which are present days plus paid leave, week-offs and holidays; (3) subtract loss-of-pay days, including half days from late marks if your rules say so; (4) multiply paid days by the per-day rate; (5) deduct PF, ESI, professional tax, TDS and advances. FundRaksha HR does all five automatically from phone attendance.
Step 1: choose the per-day rate
| Method | Formula | Effect |
|---|---|---|
| Calendar days | Monthly salary ÷ days in that month (28 to 31) | Per-day rate changes month to month |
| Fixed 30 | Monthly salary ÷ 30 | Same rate every month |
| Fixed 26 | Monthly salary ÷ 26 (working days, excluding Sundays) | Higher per-day rate; each absence costs more |
Pick one, write it into your policy and appointment letter, and apply it to everyone. Mixing methods is a common cause of disputes.
Steps 2 and 3: paid days and loss of pay
- Present days from check-in records.
- Paid leave approved and within balance.
- Week-offs and holidays as per roster and holiday list.
- Loss of pay (LOP): absent without leave, leave beyond balance, and half days under your rules.
Late marks become LOP only if your rules say so. A common rule is that 3 late marks equal one half day. Write the rule down and show it to staff.
Steps 4 and 5: earned salary and deductions
- Earned gross = monthly gross × paid days ÷ divisor (or gross − LOP days × per-day rate).
- Earned basic (for PF) is calculated the same way.
- Employee PF = 12% of earned PF wages (basic + DA), within the wage ceiling. See the PF calculator.
- Employee ESI = 0.75% of earned gross, if the employee is within the ₹21,000 limit. See the ESI calculator.
- Professional tax by state slab; TDS on projected annual income.
- Advance instalments and other agreed recoveries.
- Add incentives and reimbursements.
Full worked example
A store supervisor earns ₹24,000 gross a month: basic ₹12,000, HRA ₹6,000, other allowance ₹6,000. The month has 31 days and the company uses the calendar-days method. He was absent 2 days without leave, had 3 late marks (rule: 3 lates = one half day), and is repaying a ₹4,000 advance at ₹1,000 a month. He earned a ₹1,500 incentive.
| Step | Working | Result |
|---|---|---|
| Per-day rate | ₹24,000 ÷ 31 | ₹774.19 |
| LOP days | 2 + 0.5 | 2.5 |
| Paid days | 31 − 2.5 | 28.5 |
| Earned gross | ₹24,000 × 28.5 ÷ 31 | ₹22,064.52 |
| Earned basic | ₹12,000 × 28.5 ÷ 31 | ₹11,032.26 |
| Employee PF | 12% of ₹11,032.26 | ₹1,323.87 |
| ESI | Not deducted: his wages are above ₹21,000 | ₹0 |
| Incentive | + ₹1,500 | |
| Advance instalment | − ₹1,000 | |
| Net before PT and TDS | ₹22,064.52 + ₹1,500 − ₹1,323.87 − ₹1,000 | ₹21,240.65 |
Payroll would round these figures as per your policy and the statutory rounding rules. Check each line with the salary calculator, and show them on the salary slip.
How FundRaksha HR does it automatically
Phone check-ins, your rules, approved leave, week-offs and holidays produce paid days and LOP each day. A live salary forecast for the month updates daily for employees and admins. At month end, advances, incentives and reimbursements are added, PF, ESI, professional tax and TDS are calculated (Pro), and you review, lock and release payslips that show per-day rate, paid days, LOP, basic, HRA, PF, ESI and professional tax.
Every plan has a 30-day free trial with your real team, and there is no bill for the trial period. After that, you pay only for active employees in the month. See pricing.
Sources
Last reviewed: 2026-10-21. Information for Indian businesses; not legal advice.