PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Sr. Executive - Hr
Senior Manager - Hr
Working As Hr Exe.
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We also have encashment of leaves for this we use following formula:
W = Average number of working days = 22
N = Number of leaves to be encashed
Y = (Yearly CTC) / 12
E = Encashment (Rs)
E = (N * Y) / 22;
Hope this will help you.
From India, Mumbai
Venkat HRDear Team,
Below is a sample calculation as per Meghana’s formula:
Assuming the total yearly CTC of a person is Rs.600000/- So as per the formula Y= Rs.600000/12= Rs.50000/-
Assuming the number of leaves to be encashed is 22 (which is referrred as N)
So as per the formula the Encashment (E) is equal to (22*50000)/22, which is Rs.50000 (but here we end up with gross monthly salary)
But Rajeev Verma's statment says that it not based on the gross salary, but as per the given formula, we have got the gross salary basis, so got confused - So can any of you in the team tell us which is right? Also quote examples please
From India, Madras
Leave encashment is usually done on Basic component only but few organizations follow gross salary also for encashment. There are no rules set whether it is done on basic or on gross.
Its done based on the policy of the organization. So both are correct.
From India, New Delhi
bhardwaj_ch1Leave enchashment for Annual Leave/PL OR Earned Leave is on Basic and as per Factory Act,1948, complusory.
From India, Ahmadabad
lokesh acharyaHi Friends, for leave encashment we have to take only basic salary. Rgds Lokesh Acharya Sr.HR Executive Bangalore
sivadasanvasuHi Generally Leave encashment is being made by various organizations on the basis of basic salary only. Regards, Sivadasan
From India, Udaipur
Rakesh DavePrivilege leave Salary is on basic Salary.( Formula Basic* Number of lave Encash / 26 days). Rakesh Dave
From India, Mumbai
As per Factory Act Leave Encashment is computed on the basis of Basic Salary + Dearness Allowances. But most of the companies do not have the Salary Head of Dearness Allowances, so it is calculated only on Basic Salary.
Bhanu Pratap Singh
From India, Pune
leave encashment is based on truly on the basic + dA ,,,but the calculation of the same can also be done on the basis of gross salary provided that it is mentioned in the organozational policies in written and approved by competent authority...
From India, Jaipur