26 days vs 30 days: how to calculate salary for contract staff

What is the difference between the three methods?

All three pay the full monthly salary to someone who worked the whole month. They differ only in what one day is worth, which matters when you deduct for absence or pay for part of a month.

Worked example: ₹18,000 salary, 2 days absent and 1 half-day

Two absences and one half-day make 2.5 unpaid days. Here is the same month under each method (a 31-day month for the calendar method):

The gap between the 26-day and 30-day answers is about ₹230 for this one person. Across 100 staff, that is the difference between a quiet payday and a queue of complaints, which is why the method has to be fixed and explained in advance. Try your own numbers in the staff salary calculator, which has a switch for all three methods.

Does the law say which divisor to use?

For ordinary monthly salary, we found no law that fixes 26 or 30. It is set by the employment terms, standing orders, your contract with the client, or the way your state notifies its minimum wage. That is why practice varies so much between agencies.

The law does use 26 in a few specific places. When a minimum wage is fixed per day, rule 3(2) of the Code on Wages (Central) Rules, 2026 converts it to a monthly rate by multiplying by twenty-six, and to an hourly rate by dividing by eight. For overtime, rule 69(3) of the OSH (Central) Rules, 2026 says that for a worker paid by the month, the daily wage is 1/26 of the monthly wage. The Code on Wages (Central) Rules, 2026 also use 26 when working out wages for a rest day. These rules apply to central-sphere establishments; states have their own. Another place the law says 26 is gratuity. The Code on Social Security, 2020 says that for a monthly-rated employee, fifteen days' wages are worked out by dividing the monthly wage by twenty-six and multiplying by fifteen. That rule is for gratuity only. It does not decide how you deduct for an absence.

Your state's minimum wage notification may give both a monthly and a daily rate. If it does, read how the notification relates the two and follow it. Whatever divisor you choose, the pay for the days worked must never fall below the notified minimum wage.

Which method should a contractor choose?

• Match your client billing. If you bill the client per staff-day on 26 days, paying on a 26-day basis keeps the two in step.
• Think about weekly offs. On the 26-day basis, weekly offs are outside the 26 days, so a staff member who works on a weekly off should get an extra day's pay or a substitute off.
• Prefer simple. The 30-day basis gives the same day rate every month, which is the easiest to explain to staff.
• Be consistent. Switching method from month to month is what causes disputes. Choose once, put it in writing, and apply it to everyone in the same category.

HaazriPro works this out every month from your attendance, for every staff member and site. Start 30-day free trial  →

How do half-days, late days and overtime fit in?

A half-day is half of one day, whatever the method. A late arrival is normally a full day present. If your policy cuts pay for coming late, mark it as a half-day so the rule is visible on the sheet. For overtime, HaazriPro treats one overtime hour as one day's pay divided by 8. The Code on Wages, 2019 requires overtime at not less than twice the normal rate of wages, so check whether the double rate applies to your staff. The overtime calculator shows both.

What about daily-wage staff?

For staff paid by the day, there is no divisor. Pay is the daily wage × days worked, with half-days at half a day and paid leave as a full day. Many agencies bill the client per staff-day even when staff are paid a monthly salary, so keep the two calculations separate.

How do part months work when someone joins or leaves?

The divisor matters most when a staff member joins or leaves in the middle of a month. Take a ₹18,000 salary and someone who joins on the 11th of a 30-day month, so they are on the rolls for 20 days, of which 17 are working days and 3 are weekly offs:

The same rule must apply on the way out. If you pay a joiner on working days, pay a leaver on working days too. Mixing methods is how one staff member ends up comparing payslips with another and finding a difference nobody can explain.

How do you avoid disputes?

1. Write the method in the appointment letter: "salary for part of a month is calculated at monthly salary ÷ 26 per day".
2. Keep a clean monthly attendance sheet with one code per day.
3. Show each staff member the days counted, the day rate, and the deduction on the payslip.
4. Pay by the deadline. Under the Code on Wages, monthly wages must be paid by the 7th of the next month.

Sources

• Code on Social Security, 2020, section 53 (gratuity: ÷ 26) (India Code)
• OSH and Working Conditions (Central) Rules, 2026, rule 69 (eGazette)
• Code on Wages (Central) Rules, 2026 (eGazette)
• Code on Wages, 2019, sections 14, 16 and 17 (India Code)
• PIB, 21 Nov 2025: the four Labour Codes made effective
• Ministry of Labour: FAQs on the Labour Codes, transition of rules

This guide explains the rules in plain language. It is not legal or tax advice. Laws and rates change, so check your state's minimum wage notification and confirm with your CA before you act on it.