Earned Leave encashment calculation
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Earned Leave encashment calculation

usha_30096 Started The Discussion:

Can you please clarify about yearly calculation of Earned Leave Encashment. We have taken gross salary / 26 X no. of days. Is it correct ?

amitmahaan - Member Since: Feb 2010
bottom line is : Basic Salary / 26 * Nos of Earned Leave Balance. But you can take Gross Salary instead of Basic, if your company policy allowing that. thanks amit jain 9873436660

Anayaat - Member Since: Dec 2009
Hi there,
In order to be able to help you calculate encashment of annual leave I need you to give me the following information
•According to your Company Policy, your annual leave is in calendar days or working days, cause it makes a lot difference when calculating
•Consider different positions have different annual leave entitlements
•When calculating benefits and entitlement what do u use, basic salary or gross salary it makes a difference.
•What is your annual leave carrying forward policy in your organization
•I assume that you do this exercise is it done in 31st December
•The date in which you start Calculation
•Total No of annual leave earned
Send me this information and I will send you the matrix for calculating your annual leave encashment

R.N.Khola - Member Since: Feb 2009
Dear Member,

We are not to encash the earned leaves yearly under any of the Act but if the employee do not have any objection & is interested in getting enashment of EL yearly & if the employer also wants to pay then in my opinion your method of calculation is not at all objectionable.
Opinion/ comments submitted as requested.

With Regards,
R.N.Khola
Sr. Associate (LL & IR)
Skylark Associates, Gurgaon (Haryana)
(Labour Law Consultants)
Office: 311, AKD Tower, Sector 14, Gurgaon
(M) 09810405361 (O) 0124-4264449
Quote:
Originally Posted by usha_30096 View Post
Can you please clarify about yearly calculation of Earned Leave Encashment. We have taken gross salary / 26 X no. of days. Is it correct ?

R Devarajan - Member Since: Sep 2006
hi

if the company has a policy of providing privillege leave or earned leave during calender year, they may opt for the same. But the factories act does not insist the employer to pay such encashment. it is not the statutory obligation on the part of the employer to pay such encashment to the employee

regards


devarajan

boopathi_hr@yahoo.com - Member Since: Sep 2008
dear MEMBER,
For earned leave encashment, we should take basic salary ( not gross salary) for a month having 30 days.

For.eg A person who has totally worked 120 days, He is eligible to get 6 days for encashment. his basic salary for a day to be derived and which should be multiplied by 6 days.
Basic salary Rs.800 X 6 days = 4800/-
boopathi.n
09894190187

koteeswaranpadmanaban - Member Since: Jan 2008
pls refer the Act which is applicable to your establishment. then, refer your policy which leaves comes under. if there is no company policy on leave, refer the model standing order.

thanking you

yours friendly

koti

prasad p k - Member Since: Dec 2007
As per my knowledge wages/26* No of Days (PL). Here wages include BAsic+DA +other special pays. Regards, P K Prasad

Milind Jagtap - Member Since: Jun 2009
Dear Friend basic salary/30*No of days encashment - for staff & workmen (Basic Salary+da+vda)/30*nos days encashment

vashishthajagdeep - Member Since: Mar 2010
Dear Friends,


In case of worker earned leave calculation, only simple formula is that add all twelve months basic that one have earned in a year and multiply that with 8.33%. i.e. annual due salary * 8.33% = Leave Salary.

Vashishtha



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