Leave Encashment Calculator
Calculate the amount payable for encashing your unused leave days.
- Free to use
- No registration required
- Works on all devices
- Last updated
- 13-09-2026
Your result
₹46,153.85
Leave encashment amount
AI explanation
Formula
Daily rate = (Basic + DA) / 12 / 26. Encashment = daily rate × unused leave daysWorked example
₹7.2L annual Basic+DA, 20 unused leave days
| Field | Value |
|---|---|
| Annual Basic + DA | ₹7,20,000 |
| Unused leave days | 20 |
| Daily rate | ₹2,307.69 |
| Leave encashment amount | ₹46,153.85 |
Assumptions
- Uses the common /26 working-days-per-month divisor convention, the same one used for gratuity calculations — some companies use a /30 divisor instead, which would give a slightly lower daily rate.
Frequently asked questions
When is leave encashment paid out?
Commonly at the end of employment (resignation, retirement, or termination), though some companies also allow periodic encashment of accumulated leave during active employment.
Is leave encashment taxable?
Government employees receive it tax-free. Private-sector employees get an exemption up to a statutory limit (₹25 lakh for leave encashed at retirement, per current rules), with any excess taxed as salary income.
Why does the divisor matter (26 vs 30 days)?
A smaller divisor (26 working days rather than 30 calendar days) produces a higher daily rate and therefore a higher encashment amount — check your company's specific policy for which convention applies.
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Sources
- Code on Wages, 2019 — Ministry of Labour and Employment, Government of India. Effective 08-08-2019, checked 13-09-2026.
This calculator provides a general estimate only and does not constitute legal or tax advice. Confirm your exact entitlement with your employer's HR department.
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