My wife is about to apply for ILR having entered the UK almost 2 years ago.

In that 2-year period, she has been out of the UK on 4 occasions - one was a 2.5 month break, and another was a 1 month break.

I assume that the 2-year period starts from the date of initial entry and periods outside of the UK within the period are not "subtracted" from the 2 years.

But can anyone confirm this for me?

Thanks

I assume that the 2-year period starts from the date of initial entry and periods outside of the UK within the period are not "subtracted" from the 2 years.

You are correct. Holidays etc are not subtracted. However, if the applicant has spent a considerable time outside the UK during this period, Croydon could question whether the applicant is intent on settling in the UK.

Insert a covering letter explaining why she has spent considerable time out of the country.