What is the rule for encashment or Earned Leave? Is it paid on Gross Salary or on Basic + DA?
From India, Delhi
It depends on company policy, few companies give on Gross Salary and few company give on Basic+DA
From India, Ahmadabad
For encashment of leave, there are certain rules and its not just a policy matter of a company. The law makers who prescribed the leave for the employees also prescribed the rules of encashment. For example, in Section 79 and 80 of the Factories Act, it is stated that, when an employees is on leave, he is entitled to the salary, as if he were on work. Similarly, when any employees has left his employment, he is entitled to the wages of the balance of accumulated leave. In short, what a person would have received while on work, same is receivable while on leave or for encashment of leave.
Any policy against legal provision cannot be a policy at all, for the simple reason it is going to invite trouble.

From India, Kolhapur
I am agree with Mr. kulkarni. He guided you exactly. so you should refer this or if you need some more clarification then type on google (rule of encashment or Earned leave ) you will get the link of Citehr post related to this topic. several comments are mentioned in that post. I am sure that will be helpful for you.
From India, Gurgaon
In Shops and establishment Act there is no provision of encashment of leaves while on continuity of work. As per Act leave encashment is only after leaving the employer. So in that case few of the company encash the leave on Basic+DA and few company encash on gross salary.
From India, Ahmadabad
There are also such provisions found in the State's Shops and Establishments statute. In Maharashtra Shops and Establishments Act, in chapter 7, you will find the appropriate provisions similar to Factories Act. In short, whether it is a factory act or shops act, you will find similarity of provisions.
From India, Kolhapur
Sir with due respect, Bombay Shops and Establishment Act also does not mention the leave encashment payment while on duty/continuity of employment/encashing due to lapse of leave. The Act only states Leave encashment while terminating the employment by either side but not encashment during the employment.
From India, Ahmadabad
Dear Saji,
What you are saying is very correct. I was not talking that encashment is compulsory but I was referring to the salary rate at which encashment has to be done. Because, the original post was asking for that.
Whether to allow encashment or not is not governed by any rule. But if it is to be granted, then it should be at par with normal wages.
Perhaps you were referring to the policy of management whether to allow encashment or not and such a discretion is possible.
Thanks for your post.

From India, Kolhapur

Dear all, As a general rule, encashment of EL is on the basis of basic+DA. The allowances are payable subject to performance of duty, like conveyance, washing allowance, newspaper allowance etc, they are not payable in case the employee does not attend to his work. Hence for encashment purposes they cannot be included. KK
From India, Bhopal
In case of leave encashment, the Basic plus DA are only payable under the analogy that it does not involve House-rent and other allowances which are relevant to the period of service. In case of rates under the Minimum Wages Act, the day rate of wages is reckoned with for such calculations.

From India, Mumbai

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