The rule in one line
Each employee gets a number of free late check-ins a month. Every late check-in beyond that allowance takes off half a day's pay. That's it. It is simple enough for staff to remember and strict enough that it changes behaviour.
Three settings make it work:
- Late cut-off — the time after which a check-in counts as late, for example 9:30.
- Grace minutes — a short buffer, say 10 minutes, so 9:38 isn't late but 9:42 is.
- Monthly late allowance — how many lates are free. Five is common.
If you run shifts, each shift's own start time should win over the company cut-off. A 2 pm shift shouldn't be marked late against 9:30.
A real month, worked through
Priya's salary is Basic ₹10,000 + DA ₹2,000. October has 22 working days after the work week, alternate Saturdays and one holiday. Her month:
| What happened | Days |
|---|---|
| On time | 10 |
| Late | 8 |
| Paid leave (approved) | 2 |
| Absent without leave | 2 |
- Days worked: 10 + 8 present, plus 2 paid leave = 20.
- Late deduction: 8 lates, 5 free, so 3 extra × ½ day = 1.5 days.
- Paid days: 20 − 1.5 = 18.5 of 22.
- Earned: ₹12,000 × 18.5 ÷ 22 = ₹10,090.91.
- PF: 12% of earned Basic + DA = ₹1,211.
- ESI: 0.75% of earned gross, rounded up = ₹76 (her gross is under ₹21,000).
- Net pay: ₹8,803.91.
Try your own numbers in the PF & ESI salary calculator — it applies the same late rule.
Why half a day, and not minutes?
Some companies deduct per minute late. It sounds fair but it is hard to explain on a payslip, and staff argue about every minute. A half-day step after a free allowance is easier to communicate, easier to check, and it leaves room for the genuine bad-traffic day.
Make it fair, and make it stick
- Write it into your attendance policy and share it before the month starts. Deductions for absence should follow a written rule; check the wording with your CA or labour advisor.
- Trust the check-in time. The rule only works if a check-in can't be faked. Use a GPS work area and a face check, so a friend can't punch in for someone who is still on the bus. (How fake-GPS apps are stopped.)
- Show staff their count. "Grace used · 3 of 5 free left" on the phone does more than any circular.
- Apply it automatically. The moment someone types the deduction by hand, exceptions creep in.
How KYE HR does it
Set the cut-off, grace minutes and monthly allowance once under Attendance Rules. Every check-in is marked late or on time as it happens, staff see their remaining allowance in the app, and the month's salary takes off half a day per extra late on its own — PF and ESI follow from what was earned. See how payroll works →