The Code on Wages does not give you a divisor. It gives you a ceiling, and the ceiling moves with the employee. This sheet works to the ceiling and shows where twenty-six and thirty each belong.
Seven sheets, from the ceiling calculator to the payroll register it feeds.
Enter the wage period, the days that employee was required to work in it and the days absent. The sheet says how to count the first: days in the period, less the weekly offs they are entitled to, less any day the place was closed. Paid leave is not absence and does not belong in the second column at all. It returns the section 20(2) maximum, the rate per day implied by it, and what is PAYABLE once that maximum is taken, which is the figure you need for a mid-month joiner or a leaver rather than an absence. Moving the pattern from six days to five moves the ceiling, which is the whole point and the thing a fixed divisor cannot do.
The same salary run through the section 20(2) ceiling, through the rule 3(2) arithmetic that gives the overtime rate, and through the thirty-day convention used for leave encashment. Three answers, each correct in its own lane, with the lane named.
Section 2(y) with its first proviso. The sheet totals the excluded allowances, tests them against one-half of all remuneration and adds the excess back, so the base you divide is the base the Code means rather than the basic on the salary slip.
Every deduction for the month in one column, totalled against section 18(3). It turns red past fifty per cent and tells you what 18(4) leaves you to do about it.
Four employees on four patterns: six-day week, five-day week, a mid-month joiner and a month with a declared holiday in it. Each one shows the ceiling, the thirty-day figure and the gap between them. A seventh sheet then puts every claim in the workbook against the provision it rests on: twenty-five citations, including the one that rests on convention rather than statute and says so.
Knowing how many days each pattern required is the hard half. Attendo keeps the roster, attendance and payroll on one record.
Search the question and you get two camps. One says twenty-six because that is what the rules say, the other says thirty because that is what a month has. Both are arguing about a number the Code on Wages never sets for contractual pay.
What the Code sets is a limit. Section 18(2)(b) permits a deduction for absence from duty, and section 20(2) then caps it: the deduction shall in no case bear to the wages for the wage-period a larger proportion than the period of absence bears to the total period within that wage-period during which, by the terms of his employment, the employee was required to work.
Read that against a real employee and the divisor falls out of it. Somebody on a six-day week is required to work about twenty-six days in a thirty-day month, so a day of absence may cost at most one twenty-sixth of the month. Somebody on a five-day week is required to work about twenty-two, so their ceiling is one twenty-second, which is a bigger number, not a smaller one. Which pattern applies, and how many weekly offs come with it, is fixed by your State's shops and establishments registration rather than by this Code.
Which inverts the usual advice. Dividing by thirty is not an error. It takes less than the ceiling allows, so it is lawful and simply kinder than the law requires. Dividing by twenty-six on a six-day week sits exactly on the ceiling. The error nobody writes about is dividing by fewer days than the employee was actually required to work, which takes more than section 20(2) permits.
Twenty-six is not wrong, it is just from somewhere else. It comes from rule 3(2), which fixes the minimum rate of wages by multiplying a day by twenty-six to get a month, and that is the arithmetic behind an overtime hour. Leave encashment uses thirty and no rule says so at all, which is why it survives in a full and final settlement unchallenged. Three divisors, three homes, and this sheet is the one that names them, the same way the readiness checklist names which Code reached you.
A worked row from the sheet. Wages of ₹30,000 for September, an employee required to work twenty-six days, absent for three.
| Employee | Wages for the month | Days required | Days absent | s.20(2) ceiling | Per day |
|---|---|---|---|---|---|
| Six-day week | ₹30,000 | 26 | 3 | ₹3,461.54 | ₹1,153.85 |
| Five-day week | ₹30,000 | 22 | 3 | ₹4,090.91 | ₹1,363.64 |
| Mid-month joiner | ₹15,000 | 13 | 1 | ₹1,153.85 | ₹1,153.85 |
| Declared holiday | ₹30,000 | 25 | 2 | ₹2,400.00 | ₹1,200.00 |
| Six-day against five-day | same ₹30,000 | 26 v 22 | same 3 | ₹629.37 | more, on the five-day week |
A deduction for absence shall in no case bear a larger proportion to the wages for the wage-period than the period of absence bears to the total period the employee was required to work in it. So the maximum per-day deduction is the month divided by the days that person owed you, which is twenty-six on a six-day week and about twenty-two on a five-day week.
Source: Code on Wages, 2019, s.20(2), with s.18(2)(b)Section 18(3): the total of all deductions in any wage period shall not exceed fifty per cent of those wages, and 18(4) sends the excess into the prescribed recovery. A month of absence plus an advance recovery can cross it while every single deduction is individually right.
Source: Code on Wages, 2019, s.18(3) and 18(4), with rule 13Rule 3(2) divides a day's rate by eight to fix the hour and multiplies it by twenty-six to fix the month. The direction runs day to month, and the rule is headed manner of calculating the MINIMUM rate of wages. Reading it backwards for contractual pay is settled practice, and it is what the overtime hour rests on, but it is not what the rule prescribes. Note also whose rule it is: section 67(1) gives rule-making to the appropriate Government, and section 2(d) makes that the State for every establishment outside railways, mines, ports, air transport, telecom, banking, insurance and the central undertakings.
Source: Wages (Central) Rules, 2026, rule 3(2), central sphere; s.20(2) binds allRule 3(2) is headed manner of calculating the minimum rate of wages, and it runs from a day's rate to a month, not from a month to a day. It is the right arithmetic for an overtime hour. It is not a rule about what a day of a manager's salary is worth.
Section 20(2) sets a maximum, not a formula. Dividing by thirty takes less than the maximum, so it is lawful: it costs you money rather than exposing you. The risk runs the other way entirely. Section 54(1)(a) makes paying an employee less than the amount due under the Code punishable with a fine up to fifty thousand rupees, and deducting past the ceiling is exactly that. A repeat inside five years reaches three months or a lakh under 54(1)(b), and breaching the rules themselves is twenty thousand under 54(1)(c).
Somebody required to work twenty-two days a month has a HIGHER ceiling per day than somebody required to work twenty-six, because the month's wages buy fewer days of work. Applying one divisor across both patterns under-deducts for one and over-deducts for neither, but it stops being a defensible number the moment anybody asks how it was derived.
Section 2(y) is basic, dearness allowance and retaining allowance, and the first proviso adds back any excluded pay that exceeds one-half of all remuneration. On a typical Indian structure that proviso bites, so the base is larger than the basic and every per-day figure taken on the basic alone is too small.
Section 18(3) caps the total of all deductions in a wage period at fifty per cent of the wages for that period. Absence, an advance recovery and a fine can each be right and still cross it together. Rule 13 then decides what happens: the excess is carried forward into the next wage period in instalments, and that month’s recovery is capped at fifty per cent too.
The ceiling is built on the days the employee was required to work under the terms of employment. A weekly off or a closed holiday is not one of them, so it cannot carry a deduction, and it is not counted in the denominator either. Which holidays close the place is its own question, and the sandwich leave guide answers it. Both halves have to match, which is why the attendance record is the document this sheet leans on.
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Every figure names the provision it rests on. Attendo (formerly Petpooja Payroll) serves 40,000+ businesses. See the other free downloads.
Attendo is payroll and attendance software for Indian businesses, on a flat annual fee with no per-employee pricing. It is used across manufacturing, corporate offices, healthcare and retail. The same attendance record that decides a per-day deduction also feeds the contract terms you agreed in the first place.
Excel, free, and every divisor in it named against the provision it rests on.
