Quick answer: Loss of pay (LOP) is the salary deducted for days you were absent without paid leave. LOP deduction = per-day salary × LOP days, where the per-day salary is your monthly gross divided by the divisor your employer uses (calendar days, 30 or 26). On ₹36,000 a month, 3 LOP days in a 30-day month cost ₹3,600. The Code on Wages, 2019 allows deductions for absence, but only in proportion to the time absent. Leave without pay (LWP) is approved unpaid leave; it produces the same deduction.
LOP is one of the most common lines on an Indian payslip and one of the most disputed. This guide explains what loss of pay means, when it applies, how to calculate it with an example, what it does to PF, ESI and tax, how it differs from leave without pay, and the rules that limit it. If you came here for the political meaning, LoP in Parliament is the Leader of the Opposition; see the last question in the FAQ.
What is LOP in salary?
LOP stands for loss of pay. It is the number of days in a month for which an employee is not paid, and the matching deduction from salary. A monthly salary is earned for the whole month, including paid weekly offs and holidays; when an employee is absent and has no paid leave to cover it, those days become LOP and are deducted.
On a payslip, LOP appears in two places: the attendance section (paid days and LOP days) and the earnings, where each component is reduced in proportion. Some employers show a separate "LOP deduction" line instead. Either way, the employee is paid for paid days only.
When is LOP applied?
- Leave balance exhausted: the employee takes leave after using up earned, casual and sick leave.
- Leave not approved: the employee is absent after leave was refused, or did not apply.
- Unauthorised absence: absent without information; this can also lead to disciplinary action under the standing orders.
- Attendance shortfall: missed punches or half days, if the attendance policy converts them to LOP after a grace limit.
- Approved leave without pay: for example extended personal leave or study leave the employer agrees to without pay.
LOP should not be applied to paid holidays, paid weekly offs, approved paid leave, or days the employer itself kept the employee off work (for example a shutdown), unless the law or the policy says otherwise. Weekly offs that fall between LOP days (the "sandwich" rule) count as LOP only if the leave policy says so.
How to calculate loss of pay
- Find the per-day salary: monthly gross ÷ the days basis in your policy: calendar days in the month, a fixed 30, or 26 working days. Our guide to 26 or 30 days compares them.
- Count LOP days from the attendance and leave records for the month, including half days.
- LOP deduction = per-day salary × LOP days.
- Salary payable = monthly gross − LOP deduction, or per-day salary × paid days.
- Recalculate statutory deductions (PF, ESI, PT and TDS) on the reduced salary.
Example: 3 LOP days
Monthly gross ₹36,000 (basic ₹18,000, HRA ₹9,000, special allowance ₹9,000), calendar-day basis, November 2026 (30 days), 3 LOP days:
- Per-day salary = 36,000 ÷ 30 = ₹1,200
- LOP deduction = 1,200 × 3 = ₹3,600
- Gross payable = 36,000 − 3,600 = ₹32,400
| Component | Full month (₹) | After 3 LOP days (₹) |
|---|---|---|
| Basic | 18,000 | 16,200 |
| HRA | 9,000 | 8,100 |
| Special allowance | 9,000 | 8,100 |
| Gross | 36,000 | 32,400 |
| Employee PF (12% of basic) | 2,160 | 1,944 |
Each component falls by the same proportion (27/30), so the employee's PF falls too, from ₹2,160 to ₹1,944. Because the basic pay is below the ₹25,000 PF wage ceiling that applies from 17 September 2026, this is true whether or not the employer restricts PF to the ceiling; where basic is well above the ceiling and PF is restricted to it, a few LOP days may leave PF unchanged. Half-day LOP works the same way at half the per-day rate. To check your own payslip, use the monthly salary calculator and choose your employer's days basis.
Is loss of pay legal? The rules that limit it
Yes, within limits. The Code on Wages, 2019 lists deductions an employer may make from wages, and deductions for absence from duty are one of them. Section 20 sets the conditions (see also our Code on Wages guide):
- A deduction can be made only for the employee's absence from the place where they are required to work, for the whole or part of the period they are required to work.
- The deduction cannot be a larger share of the wages than the share of the wage period for which the employee was absent from required work (section 20(2)).
- An employee who is present but refuses to work, for example in a stay-in strike or for any other unreasonable cause, is treated as absent.
- If ten or more employees acting together are absent without due notice and without reasonable cause, the deduction can include up to eight days' wages that the contract allows in lieu of notice, subject to the government's rules.
Separately, section 18(3) caps the total of all deductions in a wage period at 50% of wages (any excess may be recovered as the rules prescribe), and wages paid for the days actually worked must not fall below the applicable minimum rate. In practice, an employer should record why each LOP day was applied, give the employee a chance to correct attendance errors before payroll closes, and apply the leave policy the same way to everyone.
LOP vs leave without pay (LWP)
| Point | LOP (loss of pay) | LWP (leave without pay) |
|---|---|---|
| What it is | The payroll deduction for any unpaid day | Unpaid leave the employee applied for and the employer approved |
| Covers | Approved unpaid leave and unauthorised absence | Only approved unpaid leave |
| Salary effect | Per-day salary × days | Same calculation |
| Disciplinary risk | Possible for unauthorised absence | None; the absence is authorised |
| Where you see it | Payslip and payroll register | Leave records and payslip |
Different employers use different labels: "LWP", "LOP leave", "unpaid leave" and, in government service, extraordinary leave all describe leave that carries no salary. What matters on the payslip is the number of unpaid days and the divisor.
How LOP affects PF, ESI, gratuity and tax
- PF: contributions are 12% of the PF wages actually paid for the month, so LOP reduces both the employee's and the employer's contribution. In the monthly ECR, whole LOP days are reported as NCP (non-contributing period) days (EPFO revamped ECR); see our PF ECR guide.
- ESI: contributions are on the wages paid, and the monthly contribution records the days for which wages were paid, so LOP days reduce both (ESIC contribution rules; see our ESI guide).
- Professional tax: in states with monthly slabs (for example Maharashtra and Karnataka), the slab applies to the salary actually paid in the month, so a large LOP can move an employee into a lower slab.
- TDS: LOP reduces taxable salary for the year, and the employer adjusts the monthly TDS for the rest of the year.
- Leave accrual and service: whether LOP days count towards leave accrual, probation or service depends on the leave rules and the policy; long periods of unpaid leave are often excluded.
LOP list, LOP form and state rules
An LOP list (or LOP report) is the monthly list payroll prepares of every employee with unpaid days: employee code, LOP days, half days, the reason (leave exhausted, unapproved, absent) and the approving manager. It is circulated to managers and employees before payroll closes so mistakes are corrected first, and it supports the deduction if it is challenged later.
An LOP form is the leave application for unpaid leave, or the HR form used to mark or reverse LOP. There is no statutory format; most employers handle it in the leave or attendance system, with the approval kept on record.
State rules (for example in Karnataka, Maharashtra or Tamil Nadu) do not prescribe a separate LOP formula. State Shops and Establishments Acts, such as the Karnataka Shops and Commercial Establishments Act, 1961, and the OSH Code set minimum paid leave, holidays and weekly offs; LOP applies only after those entitlements are used or when absence is not covered by them, and the deduction is still limited by section 20 of the Code on Wages. Check the state Act and your standing orders for the leave entitlement that applies.
How to avoid wrong LOP on your payslip
- Check the payslip's paid days and LOP days against your leave balance and attendance as soon as it arrives.
- Apply for leave in the system before payroll cut-off, and regularise missed punches promptly.
- If LOP was wrongly applied, ask HR to reverse it; the correction is usually paid as an arrear in the next month's salary.
- Employers should send an attendance and LOP summary to employees before payroll closes, so disputes are settled before the salary is paid.
For the full monthly cycle, see our payroll process guide; for the difference between gross and take-home pay, see gross vs net salary.
Related reading: Salary on 26 or 30 days · Monthly salary calculator · Attendance calculator · Leave accrual calculator
Handle LOP without manual errors. The Complete Indian Payroll Excel Workbook takes paid days and LOP for each employee and recalculates every component, PF, ESI, PT and TDS automatically.
Frequently asked questions
What is LOP in salary?
LOP, or loss of pay, is the deduction from monthly salary for days an employee was absent without paid leave. The payslip shows the LOP days and the amount, which is the per-day salary multiplied by those days, and the employee is paid only for the remaining paid days.
What is the full form of LOP?
In payroll and HR, LOP stands for loss of pay. In Indian politics the same letters are used for the Leader of the Opposition, so read it in context.
Is loss of pay legal?
Yes. The Code on Wages, 2019 allows an employer to deduct wages for absence from duty, but the deduction must be proportionate to the time absent from required work, and it is limited to the days of actual unauthorised or unpaid absence. Days of approved paid leave, paid holidays and weekly offs that are paid under the policy cannot be treated as LOP.
Which leave is not paid?
Leave without pay, also called loss of pay leave, is the unpaid kind: it is taken when paid leave is exhausted or not approved, or recorded for unauthorised absence. Earned leave, casual leave, sick leave, paid holidays and maternity leave for eligible employees are paid, as set out in the law and the employer's leave policy.
Is LOP the same as leave without pay?
In practice they lead to the same deduction. Leave without pay (LWP) usually means unpaid leave the employee applied for and the manager approved, while LOP is the payroll term for any unpaid day, including unauthorised absence. Unauthorised absence can also lead to disciplinary action; approved leave without pay does not.
Who is the LoP in the Lok Sabha?
In Parliament, LoP means the Leader of the Opposition. Rahul Gandhi of the Indian National Congress has been Leader of the Opposition in the 18th Lok Sabha since June 2024. The post is recognised by statute, the Salary and Allowances of Leaders of Opposition in Parliament Act, 1977, rather than by the Constitution. The largest opposition party's MPs choose their leader, and the Speaker formally recognises that member.
Position as of 14 November 2026. Based on the Code on Wages, 2019 (sections 18 and 20), EPFO and ESIC monthly filing rules, and common Indian payroll practice. Your employer's leave policy, standing orders and state rules govern how LOP is applied. General information, not legal or tax advice.