Hello experts, consider the following situation.
I'm paying factory worker 18000 for a month.
Per day wage if 26 days are to be considered as base for month calculation -
(18,000/26 = 692)
Now for the month of Mar, should I be paying him
692 x 27(31 days - 4 Sundays) = 18,684 which is higher than agreed amount.
so my question is that if my attendance is above base days
Should those days be taken into consideration for per day wage?
If 18K is gross then any amount above that should be included in ESI?
From India, Hyderabad
I'm paying factory worker 18000 for a month.
Per day wage if 26 days are to be considered as base for month calculation -
(18,000/26 = 692)
Now for the month of Mar, should I be paying him
692 x 27(31 days - 4 Sundays) = 18,684 which is higher than agreed amount.
so my question is that if my attendance is above base days
Should those days be taken into consideration for per day wage?
If 18K is gross then any amount above that should be included in ESI?
From India, Hyderabad
If you are paying a monthly salary, it stays the same whether the month is 28, 30 or 31 days.
The per day rate would be used mainly to compute the cost of LWP to be deducted from the salary.
Therefore you don't have to pay extra for March even though it has 5 Sundays.
From India, Mumbai
2393The per day rate would be used mainly to compute the cost of LWP to be deducted from the salary.
Therefore you don't have to pay extra for March even though it has 5 Sundays.
From India, Mumbai
If you are paying monthly salary to employees, usually the daily pro-rate amount is taken in to consideration for LWP, Overtime etc. If 18000 is the monthly gross, it is for a month and not for 28 days or 30 days or 31 days. For average daily wage, you may use the logic [Gross/Total Days]. Also weekly offs are anyway payable. So daily wage comes in to picture only when LWP or OT is there.
From India, Bangalore
From India, Bangalore
Dear Colleague,
It is understood from your write up that you are a Factory. Incase of Factory the per day wages are calculated by dividing by 26 as you rightly mentioned. Keep this very simple
- if you have daily wage employees then you have to pay the per day wages multiplied by number of days worked
- if you have monthly wage employees then keep the consolidated pay as it is for every month and it will not fluctuate. Say 18K is a constant as a figure. If the worker works for 26 days he will get this salary and 4 Weekly off is obvious. Despite 28 days or 29 days or 30 days or 31 days the Salary will not change and it will be 18K only. In Factories the Weekly Off is not a paid day. It is only a week holiday. The salary in any case will not exceed 18K for your working.
In case of PF Contribution and ESI Contribution by employer it is over and above 18K as per the narrated instance.
From India, Chennai
It is understood from your write up that you are a Factory. Incase of Factory the per day wages are calculated by dividing by 26 as you rightly mentioned. Keep this very simple
- if you have daily wage employees then you have to pay the per day wages multiplied by number of days worked
- if you have monthly wage employees then keep the consolidated pay as it is for every month and it will not fluctuate. Say 18K is a constant as a figure. If the worker works for 26 days he will get this salary and 4 Weekly off is obvious. Despite 28 days or 29 days or 30 days or 31 days the Salary will not change and it will be 18K only. In Factories the Weekly Off is not a paid day. It is only a week holiday. The salary in any case will not exceed 18K for your working.
In case of PF Contribution and ESI Contribution by employer it is over and above 18K as per the narrated instance.
From India, Chennai
Salary payable is fixed
If monthly it is exclusive of weekly off and holidyas in general.
Therefore standard remains is the workdays excluding offs.
In general 26 days or 27 days and 25 days in feb are considered as stadard for calculating per day wages.
Statutory deductions are also to be cosidered while defining salary per month.
From India, Vadodara
If monthly it is exclusive of weekly off and holidyas in general.
Therefore standard remains is the workdays excluding offs.
In general 26 days or 27 days and 25 days in feb are considered as stadard for calculating per day wages.
Statutory deductions are also to be cosidered while defining salary per month.
From India, Vadodara
When an employee is monthly rated, why we are dividing his wage with number of working days instead of total number of days of that particular month?
In my opinion, an monthly rated employee retained at Rs.18000/- salary per month and have 2 days absent in the month of March, the calculation should be : 18000/31*29=16838.70 and not 18000/26*24=16615.38 as suggested above.
Regards
From India, Delhi
In my opinion, an monthly rated employee retained at Rs.18000/- salary per month and have 2 days absent in the month of March, the calculation should be : 18000/31*29=16838.70 and not 18000/26*24=16615.38 as suggested above.
Regards
From India, Delhi
The answer by Dr. P. Shiva Kumar and Sh. P. K. Sharma read together gives the right answer. To make it simple pls. divide the gross salary (Rs.18000) by number of days in a month to arrive at per day wages in case of monthly wage employees and to calculate the wages for a particular month you need to multiply it by number of paid days considering the present days + weekly off+ holidays etc.
Adv. NEERAJ AGARWAL
Labour Law Consultants & Advisors
LEGAL WAYS LLP
From India, Lucknow
Adv. NEERAJ AGARWAL
Labour Law Consultants & Advisors
LEGAL WAYS LLP
From India, Lucknow
Hello, thank you all for the valuable inputs.
I've gone through other posts in the site wrt DAILY WAGE calculation. there're lot of mixed answers.
To arrive at daily rate...
Some say they consider number of working days as base to divide gross for given month(which varies according to the month, like in Feb we have 28-4 = 24 working days, in march it could be 31-5 = 26).
Some say they consider 26 as standard as base for all the months.(more in line with the act or in context of factory)
Some say they divide the gross by number of days of a month.(not in line with labor acts)
So there is lot of confusion.
__________________________________________________ ______________________________
From the discussion in this thread can we summarize below points.
1. For a daily wage worker his gross should be divided by 26 to arrive at per day cost payable to him(more in line with act).
so if 2600 is his gross then per day amount to be paid should be 100/-.
Then irrespective of month whether it is a 31, 30, or 28 days, we pay him for the no of days he worked on all working days.
So even if he works for 27 days because there would be month of 31 days with 4 Sundays that results in 27 working days...then
will he get 2700 or 2600?
For Feb he would work for 28-4 = 24 days...then should he get 2600 or 2400?
__________________________________________________ _______________________________
2. Let's say I don't talk about monthly figure as I mentioned 18,000. I simply hire the labor telling him I am going to pay him 500 per day.
Then I pay him for all work days irrespective of base of 26 days. Is it legal?
or I need to tell him per month 15,000 and per day 15,000/26 = 577/- instead of 500 per day?
In above case, he works all the days and is entitled to get 15,000, do I need to deduct all contributions like PF, ESI and
pay him remainder net figure?
__________________________________________________ _______________________________
3.Is there anything like Monthly wage employee in context of factory? I believe we calculate per day wage and pay aggregate at end of month.
Apart from labor people, there could also be management workforce in a factory and is it legal if I decide their base month as 30 days specific to them and 26 days for labor?
Over all, whole lot of confusion lies around labor centric payroll rather than corporate payroll process. Can we have a simplified view on this?
Thanks.
Chirag Mehta.
From India, Hyderabad
I've gone through other posts in the site wrt DAILY WAGE calculation. there're lot of mixed answers.
To arrive at daily rate...
Some say they consider number of working days as base to divide gross for given month(which varies according to the month, like in Feb we have 28-4 = 24 working days, in march it could be 31-5 = 26).
Some say they consider 26 as standard as base for all the months.(more in line with the act or in context of factory)
Some say they divide the gross by number of days of a month.(not in line with labor acts)
So there is lot of confusion.
__________________________________________________ ______________________________
From the discussion in this thread can we summarize below points.
1. For a daily wage worker his gross should be divided by 26 to arrive at per day cost payable to him(more in line with act).
so if 2600 is his gross then per day amount to be paid should be 100/-.
Then irrespective of month whether it is a 31, 30, or 28 days, we pay him for the no of days he worked on all working days.
So even if he works for 27 days because there would be month of 31 days with 4 Sundays that results in 27 working days...then
will he get 2700 or 2600?
For Feb he would work for 28-4 = 24 days...then should he get 2600 or 2400?
__________________________________________________ _______________________________
2. Let's say I don't talk about monthly figure as I mentioned 18,000. I simply hire the labor telling him I am going to pay him 500 per day.
Then I pay him for all work days irrespective of base of 26 days. Is it legal?
or I need to tell him per month 15,000 and per day 15,000/26 = 577/- instead of 500 per day?
In above case, he works all the days and is entitled to get 15,000, do I need to deduct all contributions like PF, ESI and
pay him remainder net figure?
__________________________________________________ _______________________________
3.Is there anything like Monthly wage employee in context of factory? I believe we calculate per day wage and pay aggregate at end of month.
Apart from labor people, there could also be management workforce in a factory and is it legal if I decide their base month as 30 days specific to them and 26 days for labor?
Over all, whole lot of confusion lies around labor centric payroll rather than corporate payroll process. Can we have a simplified view on this?
Thanks.
Chirag Mehta.
From India, Hyderabad
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