Hi all, As far as the information that i was provided by all of you, i construct the following salary structure and Encashment calculation.
correct me if i am wrong.
Salary Structure( 8000/- per month salary)
Components Monthly Yearly
BASIC 4000 48000
HRA 1600 19200
Conveyance allowance 1200 14400
Other allowance 1200 14400
Gross pay 8000 96000
8 PLs are encashable i.e.. Encashment calculation 4000/26*8 = 1230.76
Thank you.

From India, undefined

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As per the Shops & Establishment Act, AP is concerned
As per the Act [Shops & Establishment] in page 17 it is defined as under:
(4) Every employee who has served for a period of not less than two hundred and forty days during a continuous period of twelve months in any establishment shall be entitled for encashment of eight days of leave with wages that has accrued to him under sub section (1)* during the subsequent period of twelve months. The employer shall pay to the employee the wages for the leave so encashed by the employee within a week of receipt of the application for such encashment from the employee.
Wages here has to be construed as full salary and not just on basic as calculated by you unless of course the state govt has specifically mentioned as such.
Therefore it will 8000/26*8, it just double the amount that you had mentioned.
Thanks and Regards

From India, Hyderabad
but sir in some sites, they stating the calculation only on basic. encashment is calculated on basic or gross salary ?
From India, undefined

It boils down to the state in which you are working and the rules to be followed either Shops & Establishments Act or the Factories Act as the case may be.
Unless it is specifically mentioned it can only be assumed in favour of the employees. In this case the gross salary has to be taken.
Thanks and Regards,

From India, Hyderabad
Dear Satish Chandra
Assume that the employee is not encashing his/her leave but is availing the leave of 8 days so will you pay the salary in Full for those days or you will pay the Basic Salary for those 8 days, you will find the answer in itself.
With regards to your query few company make a policy that Leave cannot be encashed but has to availed and to curtail the encashment of PL/EL the employer states in the policy that for encashment it will be on Basic Salary only, Please check with such policy in place

From India, Ahmadabad

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