Some companies allow encashment on CTC basis. In other words, it would be ( if you follow CTC method),
Annual CTC/ 12 X 21/30. Though this method is very rare. Mostly it is on the basis of Basic salary.
Subject : PL encashment calculation
1. If PL is 21 calendar days a yr., then it is suggestive that the calculation to be done as - (basic+d.a.)/30*no, of days to be encashed.
2. If PL is 21 working days a yr., then the calculation should be , (basic+d.a.)/26*no. of days to be encashed.
Dear Deepthi ,
greetings for the day,
the encashment for the calculatio of PL should be Gross salary/26 * no. of leaves,
encashment should be done on gross salary because if an employee is not leave without prior intemation the deduction of salary should be gross not only basic and in the leave register the colomn of total earning is there which accompained by net payable/gross salary not only basic, 26 will be working days as because 1 leave should be credited in the employee account after 20 working days, calculation of encsahment should be on working days not on paid days.
thanks & regards,
Sumit Kumar Saxena,
I have gone through the comments of my dear friends and found the differences but one thing is common there that they all are insisting to pay leave encashments on basic + d.a.
ok as per the provisions it may be affirmative. but when existing employee of the unit has taken the leave and avail the same then on which salary it is worked out, the answer is on gross salary. by this analogy he could get encashment on the same when he is in your service.
The basic + d.a. formula would be followed only when the employee is leaving the job by any way. This is my personal opinion. may be i am wrong but to motivate the employees it is essential to develop the healthy environment in the unit.
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