Leave Encashment Confusion: Which Salary Components and Days Should I Use?

raveesha

Dear All,

I have a clarification on leave encashment. Which wages should be considered - Basic + DA, gross wages, or net salary (take-home)? Should it be divided by 26 or 30 days of monthly salary?

Regards,
Raveesh

R.N.Khola

Dear Raveesh,

Gross salary divided by 26. Opinion submitted as requested.

Regards,
R.N.Khola
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)
09810405361

malikjs

Dear,

There is no law as such regarding whether it should be gross or basic or basic + DA. If it is mentioned in the company policy, then we can work accordingly. It has to be divided by 26.

Regards,
J.S. Malik

siddharthc

Hi,

Please refer to the Punjab Shoppers & Commercial Est. Act of 1958 for the same. I believe it should be Basic/22*No. of EL balance subject to a maximum of 30 EL's.

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