HR Tools

Leave Encashment Calculator

Instantly estimate how much money you will receive for your unutilized Earned Leaves (EL) or Privilege Leaves (PL) when resigning or retiring.

Salary & Leaves Details

Encashment Payout

Per Day Salary Rate ₹1,538.46
Total Leave Encashment ₹69,231

Note: Leave encashment up to ₹3,00,000 is tax-free for non-government employees upon retirement or resignation under Section 10(10AA).

How is Leave Encashment Calculated?

At the time of leaving a company (resignation or retirement), you are entitled to cash out your unused Earned Leaves (EL) or Privilege Leaves (PL). This is known as Leave Encashment.

The Formula

Usually, companies calculate your per-day salary by taking your Monthly Basic Pay (plus Dearness Allowance, if applicable) and dividing it by the working days in a month. Thus, the formula is:

Leave Encashment = (Basic + DA) / (Days in month) × Unutilized Leave Days

While government sectors and traditional manufacturing usually use a 26-day divisor (excluding 4 Sundays), many modern private companies use a 30-day divisor. You can select your company's method in our calculator to get an exact figure.

Frequently Asked Questions

Leave encashment is an amount of money received in exchange for a period of leave not availed by an employee. Earned Leaves (EL) or Privilege Leaves (PL) can usually be encashed.

No, leave encashment is generally calculated only on your Basic Salary plus Dearness Allowance (DA). Allowances like HRA and special allowances are usually excluded.

Leave encashment received during employment is fully taxable. However, leave encashment received at the time of retirement or resignation has certain tax exemptions under Section 10(10AA) depending on whether you are a government or private employee.

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