Dear Manish,
Generally, if we divide salary by 26 days, an employee's daily wage will be higher compared to 30 days. If an employee takes 2 or 3 days off, except Sunday, their deductions will be greater than for 30 days. Therefore, dividing the salary by 30 is more beneficial for the employee.
With Regards,
Manish Dave
HR Manager
Balaji Construction
From India, Pune
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Generally, if we divide salary by 26 days, an employee's daily wage will be higher compared to 30 days. If an employee takes 2 or 3 days off, except Sunday, their deductions will be greater than for 30 days. Therefore, dividing the salary by 30 is more beneficial for the employee.
With Regards,
Manish Dave
HR Manager
Balaji Construction
From India, Pune
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Dear Reemawadhwa,
There is no difference between the terms "salary" and "wage." Both are the same. The applicability of any labor law has to be decided with reference to the provisions of that particular law and not based on the terms "salary" or "wage."
With regards
From India, Madras
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181There is no difference between the terms "salary" and "wage." Both are the same. The applicability of any labor law has to be decided with reference to the provisions of that particular law and not based on the terms "salary" or "wage."
With regards
From India, Madras
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[QUOTE=Manish Gadre;1609964]Dear All,
I have come across an interesting situation as follows: Our employees are permanent employees employed for a specific monthly salary. On the payslip, it is shown that the employee has worked for 26 days and had 4 week offs. The Labour Inspector is saying that we cannot divide the salary of the employee by 30 days, and it needs to be divided by 26 days. The logic he is giving is that as per the law, after working for 6 days, the employee is entitled to 1 day off per week, and thus we cannot claim that we are paying for the employee's day off. If I divide the monthly salary by 26 days, then the daily rate of wages goes up. What is your opinion???
I think there is a confusion in his mind regarding the gratuity act, wherein the calculation is based on 26 days. In the case of monthly wages/salary payments, it is usually calculated based on the actual number of days of the particular month. However, in some organizations, for the sake of simplicity, it is taken as a standard 30 days (including for the month of February).
Take an example: If a person has worked up to the 20th of a particular month, which is not a weekend, i.e., Saturday, then he would be eligible for wages up to the 20th only on a pro-rata basis. But in case the 20th happens to be a Saturday, then, in that case, he would be paid wages for Sunday also, provided he has actually worked for the full week (preceding days). If he has been absent during the week and he is not entitled to leave, wages for that day would be deducted as well as he would not be entitled to wages for the 21st. This is a logical approach that may be taken.
Regards,
S.G. Bhavnani
From India, Delhi
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I have come across an interesting situation as follows: Our employees are permanent employees employed for a specific monthly salary. On the payslip, it is shown that the employee has worked for 26 days and had 4 week offs. The Labour Inspector is saying that we cannot divide the salary of the employee by 30 days, and it needs to be divided by 26 days. The logic he is giving is that as per the law, after working for 6 days, the employee is entitled to 1 day off per week, and thus we cannot claim that we are paying for the employee's day off. If I divide the monthly salary by 26 days, then the daily rate of wages goes up. What is your opinion???
I think there is a confusion in his mind regarding the gratuity act, wherein the calculation is based on 26 days. In the case of monthly wages/salary payments, it is usually calculated based on the actual number of days of the particular month. However, in some organizations, for the sake of simplicity, it is taken as a standard 30 days (including for the month of February).
Take an example: If a person has worked up to the 20th of a particular month, which is not a weekend, i.e., Saturday, then he would be eligible for wages up to the 20th only on a pro-rata basis. But in case the 20th happens to be a Saturday, then, in that case, he would be paid wages for Sunday also, provided he has actually worked for the full week (preceding days). If he has been absent during the week and he is not entitled to leave, wages for that day would be deducted as well as he would not be entitled to wages for the 21st. This is a logical approach that may be taken.
Regards,
S.G. Bhavnani
From India, Delhi
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Dear Mr.Santhoshharshe Please read my first post in this thread. Wages for weekly off depends on the Act applicable to the establishment in which the worker is employed. With regards
From India, Madras
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From India, Madras
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Dear all,
Calculating daily wages varies from one establishment to another depending on the applicable laws, such as the Factories Act, Shops and Establishments Act, Mines Act, Plantation Labour Act, or Motor Transport Workers Act. In my case, working in a mine, the Factory Act, Shops and Establishments Act, and Mines Act are all applicable.
In my organization, executives are paid based on 30 days, while non-executives are paid based on 26 days, regardless of whether they are monthly rated, time-rated, or daily rated, or even piece-rated (although piece jobs are not available, designations exist). Additionally, the calculation may also be influenced by the relationship between the union and management.
Thank you.
From India, Raigarh
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Calculating daily wages varies from one establishment to another depending on the applicable laws, such as the Factories Act, Shops and Establishments Act, Mines Act, Plantation Labour Act, or Motor Transport Workers Act. In my case, working in a mine, the Factory Act, Shops and Establishments Act, and Mines Act are all applicable.
In my organization, executives are paid based on 30 days, while non-executives are paid based on 26 days, regardless of whether they are monthly rated, time-rated, or daily rated, or even piece-rated (although piece jobs are not available, designations exist). Additionally, the calculation may also be influenced by the relationship between the union and management.
Thank you.
From India, Raigarh
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Dear all,
If we go through the notification regarding the minimum wages issued, we can find the answer. In the notification itself, two rates are given:
1) Total wages payable per month
2) Daily rate of wages per day
Secondly, we cannot pay less than the minimum wages. For example, in Andhra Pradesh (AP), the skilled monthly rate is 6922.00, and the daily rate is 266.23. You can see that the daily rate is calculated by multiplying the daily rate by 26 days. This is as simple as that.
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If we go through the notification regarding the minimum wages issued, we can find the answer. In the notification itself, two rates are given:
1) Total wages payable per month
2) Daily rate of wages per day
Secondly, we cannot pay less than the minimum wages. For example, in Andhra Pradesh (AP), the skilled monthly rate is 6922.00, and the daily rate is 266.23. You can see that the daily rate is calculated by multiplying the daily rate by 26 days. This is as simple as that.
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Salary rule is to divide the monthly salary by 30 days, not by 26 days, which is quite logical as well.
As per labor law, every employer is bound to give one paid leave after 6 working days. That means the employer is paying for 30 days, not for 26 days, so it will be divided by 30.
From India, Ghaziabad
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As per labor law, every employer is bound to give one paid leave after 6 working days. That means the employer is paying for 30 days, not for 26 days, so it will be divided by 30.
From India, Ghaziabad
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Dear All,
It is really confusing. What people are apparently worried about is that if they follow the labor inspector's advice, the costs will go high. It boils down to us being more concerned with keeping the costs than complying with the law and the spirit of the law. Are we not splitting hairs? Death and taxes cannot be avoided. Either we try to comply or "save" in the short run and later pay a hefty penalty. If the law is silent, then the section needs to be viewed from the spirit instead of the letter.
Regards,
AK
From India, Bangalore
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It is really confusing. What people are apparently worried about is that if they follow the labor inspector's advice, the costs will go high. It boils down to us being more concerned with keeping the costs than complying with the law and the spirit of the law. Are we not splitting hairs? Death and taxes cannot be avoided. Either we try to comply or "save" in the short run and later pay a hefty penalty. If the law is silent, then the section needs to be viewed from the spirit instead of the letter.
Regards,
AK
From India, Bangalore
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Hi Manish, For monthly rated employees, the monthly salary is divided by the number of calendar days in a given month and not 26. Regards
From India, Mumbai
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From India, Mumbai
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My opinions are against the labor officer. If this calculation is for an employee working on a monthly wage, then it should be divided by 30, since the holiday is a paid one. If an employee reports to work on that day, we have to pay him at the rate of $150 per hour, which is how you pay when someone works overtime. Does the labor inspector mean that in the months where there are many off days for either Diwali or other occasions, do we calculate their wages for that month as salary/25 or /24? This is ridiculous. Divisible by 30 days is also widely accepted worldwide, even if the month has 31 days.
However, if you need to determine how to calculate the daily wage for a temporary employee or one who works on an hourly basis, then dividing by the exact number of days worked is acceptable.
From United Arab Emirates, Dubai
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However, if you need to determine how to calculate the daily wage for a temporary employee or one who works on an hourly basis, then dividing by the exact number of days worked is acceptable.
From United Arab Emirates, Dubai
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SALARY SHEET CALCULATION.xls
Salary calculation.doc