Leave Without Pay deduction

In every monthly payroll cycle the system checks for LWP for all the previous days including months for which payroll has already been processed but upto the "Effective date" of the "LWP deduction needed" and "Automatically convert absent records to LWP".

In process leave, work from home, tour, backdated attendance approval and pending attendance due to missing out time are not considered as missing attendance for conversion to LWP in payroll.

For employees the Absent / LWP data is picked up only from the first payroll month which is updated in the system. For new joiners who are joining towards the end of month the first payroll month is set as the next month. In this case system will not pick up the missing attendance or LWP records as explained in the example below.

Example -
Date of Joining : 27-Nov-2021
First Payroll Month : Dec-2021

Attendance Status for November 21
27-Nov : Present
28-Nov : Weekly Off
29-Nov : Absent
30-Nov : Leave Without Pay

Number of days worked in November 21 : 2 (this is inputted by the Payroll Manager)

In the above scenario if the Payroll Manager updates 4 instead of 2 then the employee will be paid 4 days salary in November

LWP deductions are calculated on the basis of these values / parameters -
1. Number of days of LWP
2. Heads of salary included in LWP deduction in Setup
3. Actual salary paid against these heads
4. Number of working days in the month - based on setup it can be "fixed value" or "actual number of days in the month"
5. LWP cutoff date - this is a date taken in setup and only leaves upto this date are considered in payroll

Example
Suppose we are running March 2016 payroll
Number of days of LWP = 2 (10/Mar and 25/Feb)
Heads of salary included in LWP deduction
  - Basic : 15,000
  - HRA :    7,500

Number of working days in month = actual

LWP deduction = 1 x (15000 + 7500) / 31 + 1 x (15000 + 7500)/29

Note:
1. If arrears are being paid in a month due to a salary increment being done with a back date and there are Leave Without Pay deductions for current or past months being processed. The arrears also will be reduced due to LWP

2. If LWP is being deduction for previous months – for example in July payroll we deduct 2 days leave without pay taken in June – then this deduction will be done based on the salary structure and deduction matrix which was there in June. Any subsequent arrears paid on account of June whether in July payroll or later will also be corrected for these LWP days

3. If LWP has been approved for previous financial year in the current month then the deduction of salary due to this LWP will be done only in current month's payroll (if you are running previous month's payroll then deduction will not happen). The same is not true if the LWP is for the current financial year, system will deduct the amount linked to LWP even if you running payroll for an earlier month 

Leave Without Pay reversal

You can configure pay-slip to clearly shows the amount being deducted or paid back due to LWP deduction or reversal as arrears

Note : If you want to prevent withdrawal of LWP which has been accounted for in Payroll by employee or their managers then parameter "Deducted LWP withdrawal allowed Yes/No"  should be set as No in setup.