How leave and attendance affect payroll
Which days are paid, what counts as loss of pay (LOP), and how to make sure attendance and leave are right before running payroll.
Payroll looks at every working day of the month and asks one question: does this day have attendance or paid leave? Anything missing becomes loss of pay (LOP).
How each working day is paid
| Day | Paid credit |
|---|---|
| Present or Late | 1 day |
| Half day | ½ day |
| Half day with an approved paid half-day leave | 1 day (½ worked + ½ leave) |
| On leave — paid leave type | 1 day |
| On leave — unpaid leave type (for example Leave Without Pay) | 0 — loss of pay |
| Absent, Missing punch, Short hours | 0 — loss of pay |
| No record at all | 0 — loss of pay |
Weekly offs and holidays are not working days, so they are never loss of pay. Days before joining or after the last working day are simply not payable — they are not shown as LOP either.
Salary is reduced once for the month: monthly pay × (1 − LOP days ÷ the day divisor your company uses — working days, calendar days, 30 or 26). See Per-day salary basis, LOP and overtime for how the divisor is chosen.
Other leave items in payroll
- Encashment from Leave Balances, or at year end, is added to payroll as a pending adjustment.
- Attendance penalisation books automatic leave: from paid leave while the balance lasts, otherwise as unpaid (LOP). See Attendance penalisation rules.
- Negative balance recovery at year end can be deducted from salary if the leave type's policy says so.
- Overtime minutes and late counts from attendance are also passed to payroll.
Before you run payroll
- Open the Monthly register on Time & Attendance → Attendance for the month.
- Look for A, MP and SH days — each is unpaid.
- Ask employees to send regularization requests, or correct the days yourself.
- Approve or reject all pending leave and regularization requests for the month.
- Then run payroll.
Once a month's payroll is approved, its attendance and leave are locked. Attendance edits, regularizations, leave approvals and cancellations for that month are refused until the payroll is unlocked.