Unpaid Leave Deductions: Is It Based on Basic, Basic + DA, or Gross Salary?

Hi All,

Can anybody enhance my knowledge? I just want to know if the deduction for the unpaid leave is done based on:
1. Basic Salary
2. Basic + DA
3. Gross Salary

Regards,
Punita

Dear Punita,

The unpaid leave is deducted from gross salary only. I hope your doubt is clear now.

Cheers,
Soma 😀

Thank you, Soma, for clearing my doubt.

One more thing I would like to know is about the calculation of the PL encashment. Will that be based on the basic salary or the gross salary?

:lol:

Dear Punitha,

To my knowledge, the calculation for unpaid leave (EL Encashment) is as follows:

Basic + D.A * No. of unpaid leave / 30 Days

For example, if an employee's basic salary is Rs. 3000/- and D.A. is Rs. 2000, and the unpaid leave is 20 days, the calculation is as mentioned below:

Rs. 3000 + Rs. 2000 * 20 days of leave / 30 days = Rs. 3333.33/-

The encashment amount is Rs. 3333.33/-.

The leave encashment amount is subject to P.F. deduction as per the recent notification.

Regards,
S. Achuthananda

Hi,

It depends on the company policy. Some companies encash leaves based on the gross salary. The general norm is basic + DA.

Regards,
Jayaraj