Attendance is the foundation of every wage calculation. Get it wrong and wages are wrong, overtime is wrong, leave balances are wrong, and arguments follow at month end. Get it right and most payroll questions answer themselves.
In many small businesses, attendance lives in a notebook near the counter or in the supervisor's memory. That works with three staff. With fifteen, or two shifts, it breaks.
01What to record
For each person, each day:
- Present or absent,
- and for half days, which half
- Time in and time out,
- where hours matter, such as in shifts or with overtime
- Leave taken,
- and the type: earned, sick, casual or unpaid
- Weekly off and holidays
- Overtime hours,
- separately from normal hours
- Late arrival or early leaving,
- if your policy deducts for it
02The register the law expects
Under the Code on Wages, an employer keeps an attendance register cum muster roll, along with registers of wages, overtime, and fines and deductions. These can be kept in physical or electronic form, must be kept up to date, and records are preserved for five years, as of October 2026.
An electronic register is easier to keep, harder to lose and simpler to produce when an inspector or your CA asks.
03Ways to record attendance
| Method | Works for | Watch out for |
|---|---|---|
| Paper register, signed daily | 2 to 10 staff, one location | Entries filled in later, lost pages |
| Supervisor marks on a phone or computer | Shops, offices, small factories | Supervisor must do it daily |
| Staff mark their own on a phone | Field staff, sales, multiple sites | Needs checks on location or time |
| Biometric device | Factories, larger shops, shifts | Device downtime, data privacy |
Most small businesses start with a supervisor or the owner marking attendance each morning. The method matters less than doing it every day, on the day.
04Link attendance to wages
At month end, attendance becomes the basis for wages:
- Monthly staff
- paid for the month, less unpaid absences.
- Daily-rated workers
- paid for the days worked.
- Overtime
- paid at least twice the normal rate, for those whose minimum wage is fixed under the Code.
A worked example
A Surat embroidery unit pays a machine operator ₹16,900 a month for 26 working days, a daily rate of ₹650. In October he worked 24 days, took 1 day of earned leave and was absent without leave for 1 day. He also worked 10 hours of overtime.
- Paid days: 24 worked + 1 earned leave = 25 days
- Wages for paid days: 25 × ₹650 = ₹16,250
- Hourly rate on an 8 hour day: ₹650 ÷ 8 = ₹81.25
- Overtime: 10 hours × ₹81.25 × 2 = ₹1,625
- Gross wages: ₹17,875, before deductions such as PF and ESI where they apply
How you work out the daily rate, on 26 days, 30 days or the days in the month, should be in the appointment letter and applied the same way every month.
05Overtime
Under the OSH Code, as explained in the Ministry's FAQs, a worker who works more than eight hours in a day or more than 48 hours in a week is entitled to overtime wages at twice the normal rate, paid at the end of the wage period. The consent of the worker is needed for overtime. State rules set limits on overtime hours. Record overtime in the overtime register, separately from normal hours.
06Leave and attendance
Leave should be applied for and approved before it is taken, except in emergencies. Record each day of leave with its type, and keep a running balance for each person. See leave policy for a small business.
07Field staff and several locations
For salespeople, service technicians and drivers, attendance is harder to see. Options:
- A daily check-in by phone
- or message to the supervisor at a fixed time
- Marking attendance on a phone
- with location, where staff agree to it
- A daily visit report
- listing customers seen
For a business with a shop and a godown, or two branches, give each location's supervisor the job of marking attendance for their staff.
08Handling disputes
Most disputes come from three sources: days not recorded, half days recorded as full days or absent days, and overtime agreed verbally and not recorded. Fix them by:
- Recording on the day, every day
- Letting staff see their own attendance during the month
- Recording overtime only when approved, with the hours
A staff member who sees "22 days present" on the 20th of the month can point out a mistake while everyone remembers. A staff member who sees it on payday cannot.
09Closing attendance for the month
Pick a fixed date to close attendance, such as the last working day of the month, and a person to do it. On that day:
- Check that every working day has an entry for every person.
- Confirm leave taken against approved applications.
- Confirm overtime hours against approvals.
- Share each person's summary with them, so they can raise errors.
- Lock the month and use it for wages.
Changes after the close go into the next month as an adjustment, with a note. This keeps the wage register, the wage slips and the attendance register in agreement.
10Privacy
Attendance records, and especially biometric data, are personal data. Use them for attendance and wages, keep them secure, and limit who can see them. If you use a biometric device, tell staff what is collected and why. See the DPDP Act for small business.
11What changes as you grow
- Up to 10 staff
- daily marking by the owner or supervisor, and a monthly check before wages.
- 10 to 50 staff
- a named person responsible for attendance, approved leave and overtime, and staff able to see their own records.
- 50 and above
- shifts, several supervisors, and attendance closed for the month on a fixed date before wages are worked out.
In MatruOS, you add staff and mark attendance for each day, and staff can be invited to sign in by email or with a WhatsApp or copy link.