HARISH BABU KM
Updated on 06-11-2026
When an employee resigns, the notice period should be simple: work until the last day, hand over responsibilities and leave on good terms. In reality, things get messy. An employee may fall sick, take planned leave or go on loss of pay days during the notice period, and suddenly both sides are asking the same question: do those days count?
The answer depends on your contract and policy, but the real problem is usually not the rule. It is the record. When attendance sits in one sheet, leave in another and payroll in a third, one missed entry can change an exit date and a final payout. This guide explains how leave and LOP work during notice, what employers and employees should check, and how to keep the numbers clean so the final settlement matches the records.
Curious how this looks in a real system? See how Ledgers tracks leave, LOP and exits.
In most companies, the notice period is meant to be worked, not spent on leave. The employer pays for those days so that work can be handed over, which is why many policies do not allow employees to adjust their leave balance against the notice.
Common practices include:
Policies differ, so the appointment letter and leave policy are the final guide.
Loss of pay, or LOP, means a day is unpaid because the employee was absent without leave balance or approval. LOP during notice is usually treated more strictly than paid leave.
In many organizations:
Taking LOP does not automatically shorten or end the notice period.
India does not have a single rule fixing notice terms for every private sector job. The details usually come from the appointment letter, company policy and applicable state or sector laws, such as shops and establishments rules.
Before planning leave during notice, check:
Not every absence is a policy choice. Statutory entitlements, such as maternity benefit, and medical leave under applicable laws or state rules generally cannot be overridden by a notice clause. How these days affect the last working day varies by situation, so HR should confirm with a legal advisor before treating them like ordinary leave or LOP. Employees should raise these cases with HR early and in writing.
Employers should keep the process fair and documented:
Steps 3, 4 and 7 are where manual tracking breaks down first. They are also where a connected system helps most, as the next sections show.
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A few simple habits prevent most disputes:
A transparent, polite approach also helps you receive your relieving and experience letters on time.
The standard LOP formula, though policies vary, is:
LOP deduction = (Monthly salary ÷ 30) × LOP days
Some companies divide by the actual days in the month or by working days instead, so always use the divisor your payroll policy specifies.
Example - An employee earns ₹60,000 a month, has a 60 day notice period and takes 5 days of LOP.
If the same notice were counted in working days, weekly offs would be treated differently and the exit date would change. One day off can shift the exit date and the final payout, which is why accurate daily records matter.
See Ledgers calculate LOP and the last working day automatically.
When notice is not fully served, three things usually come into play:
Relieving and experience letters are usually tied to the exit formalities being completed, so it helps to be clear about this before the last day.
Spreadsheets can handle a few exits, but they struggle when many employees are on notice. Modern tools connect attendance, leave and payroll, so each day is recorded once and used everywhere.
For teams managing exits, that means:
Instead of reconciling three sheets at the end of every exit, HR gets one organised record from resignation to settlement.
Explore Ledgers attendance and leave & Ledgers payroll - Book a demo
Watch out for these common issues:
The table below summarizes the usual treatment. Always follow the company policy and contract.
Situation | Counts as Notice Served | Salary Impact | Typical Action |
Approved paid leave, policy allows | Often yes | Paid as normal, leave balance reduced | Confirm in writing |
Approved paid leave, policy restricts | Usually no | Paid as normal | Extend the last working day |
Loss of pay days | Usually no | Salary ÷ 30 × LOP days deducted | Extend notice or recover shortfall |
Unauthorised absence | No | LOP applies | Record and follow policy |
Weekly offs and holidays | Yes, if notice is in calendar days | Paid as per policy | No change |
Garden leave | Yes | Full salary continues | Employer decision, in writing |
Medical or statutory leave | Depends on law and policy | As per entitlement | Seek HR or legal guidance |
Serving notice on leave or loss of pay becomes simple when both sides know the rules: check the contract, get approvals in writing, track attendance daily and settle the final payout carefully. The rules are the easy part. Keeping the records right for every exit is where most teams lose time.
Ready to make notice period tracking effortless? Explore Ledgers to manage attendance, leave, payroll and exits in one organised system, and see how much smoother every calculation can be.
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