How to Calculate Per Day Salary Correctly, With 5 Examples

Per day salary is the monthly salary divided by a number of days, usually 26, 30 or the days in that month. Payroll uses it more often than most people notice.

It prices an absent day, an overtime hour, a leave payout, a final settlement and gratuity. This page shows the calculation for each of those five, with a worked example on the same salary.

What surprised me is how little the law says. Across the four labour codes, the number of days is fixed exactly once, and that is for gratuity.

How to Calculate Per Day Salary

This section sets out the sum and names the one part of it you have to decide for yourself.

The arithmetic is short:

Per day salary = monthly salary ÷ days counted

The top number is on the appointment letter. The bottom number, the days you divide by, is not written anywhere. You have to choose it.

Three choices are common: 26, which is roughly a month less its Sundays, a flat 30, or the actual days in that month. On a salary of ₹31,200 (an example), 26 gives ₹1,200 a day and 30 gives ₹1,040.

Whichever you pick, write it down and use it every month. The rest of this page uses a 30-day June, and says so where the law asks for something else.

Per Day Salary for 5 Common Payments

Every example below uses the same ₹31,200 monthly salary, taken as wages in full to keep the sums simple. In a 30-day June, that is ₹31,200 ÷ 30 = ₹1,040 a day.

Here is how each of the five is worked out, and who decides the number of days.

1. Loss of Pay for an Absent Day

An unauthorised absence comes off the salary at a day rate. No Code names the number of days for it, so this is a policy decision inside your own attendance rules.

Worked example: a supermarket cashier misses two days in June without approval. The deduction is ₹1,040 × 2 = ₹2,080, and the month’s pay becomes ₹29,120.

Most payroll runs use the calendar month here, because a monthly salary already covers Sundays and holidays.

Using 26 would take ₹1,200 a day instead, for a salary that already paid for the Sundays around the absence. Our working days calculator separates the days you opened from the days you paid for.

2. Overtime Pay per Hour

Section 27 of the OSH Code, 2020 fixes the multiplier and nothing else. Overtime is paid at twice the rate of wages, past the hours your government prescribes. The base rate comes from your own per day salary.

Worked example: a fabrication unit in Ahmedabad runs an 8-hour shift (an example). The hourly rate is ₹1,040 ÷ 8 = ₹130, so an overtime hour is ₹260. Ten overtime hours in June come to ₹2,600.

Built off 26 days, the same hour would start from ₹150 and pay ₹300. Our overtime calculation template keeps the base and the multiplier in separate columns for that reason.

3. Leave Encashment

Section 32 of the OSH Code gives an employee the right to encash leave, caps what carries forward at thirty days, and leaves the limits to rules. It never says what a leave day is worth.

Worked example: a teacher at a school leaves with 12 days of unused earned leave. The payout is ₹1,040 × 12 = ₹12,480. Our leave encashment calculator shows the working.

4. Full and Final Settlement

Section 17(2) of the Code on Wages, 2019 fixes the clock, not the arithmetic. Wages owed on removal, dismissal, retrenchment or resignation are payable within two working days.

Worked example: an analyst at an IT services firm in Pune resigns, and the last working day is 18 June. The unpaid salary is ₹1,040 × 18 = ₹18,720, before any leave encashment or other dues are added.

Two working days is not long to settle an argument about the number of days. If it is not already written down, it gets decided in a hurry by whoever is preparing the settlement.

5. Gratuity

This is the one the law settles. Section 53 of the Social Security Code, 2020 says that for a monthly rated employee, fifteen days’ wages are worked out by dividing the monthly rate of wages last drawn by twenty-six.

Worked example: a front office manager at a hotel in Jaipur leaves after five completed years on ₹31,200. That is ₹31,200 ÷ 26 = ₹1,200, times fifteen = ₹18,000 a year, and ₹90,000 for five years.

Read the five together and the split is easier to see:

Four of the five are yours, which is a freedom until two people in the same office use it differently. The next section shows what the fifth costs when it is ignored.

Per Day Salary Rule for Gratuity

Before you set a policy, it is worth seeing how narrow the statutory instruction actually is. I read the gazettes rather than a summary, because this is a point people assert in both directions.

In the case of a monthly rated employee, the fifteen days’ wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen.

Section 53, the Code on Social Security, 2020

Search the four codes for that instruction and it appears once. The word twenty-six turns up five times in the Social Security Code, and four of those are twenty-six weeks of maternity benefit. The Code on Wages never uses it at all.

Now run the hotel manager’s gratuity on 30 days by mistake. It becomes ₹1,040 × 15, or ₹15,600 a year, against ₹18,000 on 26.

That is ₹2,400 short for every completed year. Five years is the service that qualifies somebody for gratuity at all, so ₹2,400 × 5 is ₹12,000 underpaid on a single exit.

Section 6(5) of the Code on Wages explains why the other four are open. It says the manner of calculating wages shall be such as may be prescribed, which hands the method to rules rather than fixing it in the Code.

Common Per Day Salary Mistakes

Four faults turn up again and again once you have chosen the days. Each one changes the money without anyone editing a policy.

1. The days change between payments. One person uses 26 for a final settlement while another uses the calendar month for loss of pay. The two only meet when an employee compares two payslips.
2. The days change with the month. Calendar days are fine, but only if you use them every month. Thirty in June and twenty-six in July is not a policy, it is a mood.
3. Gratuity is worked out on 30. A diagnostic lab that settles a five-year exit this way is ₹12,000 short on a ₹31,200 salary, and the shortfall is checkable.
4. The number is never written down. Two people build the same settlement and disagree, usually on the 7th of the month when it is too late. The salary sheet template has a column for it.

How Many Days to Use for Per Day Salary

Per day salary is one sum with one open number: the days you divide by. Pick 26 and every day is worth more than on 30. Pick the calendar month and the rate moves through the year.

For gratuity the choice is made for you: divide by 26, because section 53 says so. For loss of pay, overtime, encashment and the final settlement, pick one and use it everywhere.

You can run your own figure through our free per day salary calculator. If you would rather the number came from a rule your payroll already holds, attendohr.com is the place to start.

Frequently Asked Questions