Insolvency N Gst Professional
Human Resources
Kolkata, Manager-hr
Sap Hr & Hr
+2 Others

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Dear All,
Please help in clearing my confusion. Can leave encashments (leave including sick leave, casual leave and earned leave) be a part of CTC. My friend's company is denying any leave to its employee saying their CTC includes their leave salary. whenever an employee takes any leave his salary is deducted and no encashments given for leave what so ever.
Kindly guide, is this legal and provide supporting law clauses.
Thanks & Regards,

Only Earned Leaves (EL) ia a part of encashment leaves as these leaves are earned only when we serve the organisation and it is been calculated on the number of days basis for a particular month.
Hope so your confusion is clear.

My question was can a company claim that they have given all leave entitlements in the employee’s ctc and they will not be giving any paid leave bcoz of that...???
If the leaves are availavle on prorata basis how these can be part of CTC??? Quiet confusing, in which company your friend is working!!!
Leave encashment cannot b a part of CTC as it is not a fixed amnt that u will get surely in ur salary, coz leave encashment can b earned only if employee has not availed the PRE. LEAVE. Again number of leave encashment vary from employee to employee; so off course leave encashment cannot b a part of employees ctc.
(but again one should conform from employer's ctc policy.)

as per income tax,leave encashemnt is taxable,when we have tax treatment for leave encahsment,then why it should not be a part of CTC.
when an employee take leave, the employer have to pay full salary, so why not the leave would be taken in calculation in CTC.
Dear Jyoti, only leave encasement for PL (Privilege leave) Formula- gross salary*pl*12/365 Regards Bhanu Asst.Manager HR Brand Concepts Pvt. Ltd. Indore Mob.8085581778
it is one of the most confusing questions. further I think it should not be included into the employee's CTC as I have not found discussed regarding this matter any where in the management book.
Rajib Mondal,
Manager- Corporate HR (EAL)

Leave encashment as part of CTC
1) Should not be included since encashment arises only if employee does not take leave
2) Rate of leave encashment can vary if employee retires after say 10 years of service or so.
Therefore with these variables in place, accounting for LE as part of CTC may not be appropriate.

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