How Do I Calculate Earned Leave Payout for a Resigned Employee?

Encashment of Earned Leave (EL) for Resigned Employee

This is regarding the encashment of EL for the resigned employee. Details are given below:

- EL = 16
- Current Basic Salary = 18,000
- Date of Leaving = 25/02/2013

Kindly suggest to me how to calculate the per-day salary and EL amount.

Thanks & Regards,
Dipti Sharma

What is the EL year applicable in your company? In some companies, it is as per the calendar year. If so, please check whether you have calculated earnings for EL from January to 25th February 2013.

If the balance is correct as mentioned by you, then EL Encashment shall be calculated as per the below calculation:
Basic / 30 * No. of EL balance
In your case:
18000
_____ X 16 = 9600/-
30

Regards,
Ajay
[Phone Number Removed For Privacy Reasons]

In general, leave encashment of earned leaves is calculated based on the employee's Basic Salary. This is calculated by dividing the monthly basic salary by 30.

Every year has 365 days, and every fourth year is a leap year, having 366 days. Therefore, the exact formula for the calculation of the salary for the purpose of calculating earned leave should be the Monthly Salary multiplied by 12 and divided by 365.25. We are using the same formula for the payment of earned leave as well as overtime, if any.