Re: Earn Leave Encashment

Hello,
Can any one plz tell me the formula of encashment of earn leaves at the year ending.
Thank you
anju

Hi,
One day leave is one day pay calculated by 26 or 30, as you calculats salary every month.
Suppose your company given an employee 15 Eearned Leaves every year and one of the employees availed only 5 ELs, thus at the end of the year, he is left with 10 EL in his account.
Suppose his salary is Rs. 6000 per month upon dividing 6000 by 30 we get Rs. 200 per day
thus employee will be paid leave encashment of Rs. 200*10 leaves =Rs. 2000.
In other case, if you divide it by 26, the one day pay shall be Rs. 231 thus 10 days of EL shall be encashed at Rs. 2310.
I hope it's clear.
warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)

Hi Anju,
Calculation of Earned leaves is based on the policy of the organisation.
EL is calculated based on basic + HRA.
Calculation for 25 unused ELs.
Basic: 5000
HRA: 2000 (40% of basic)
EL per day: (5000/+ 2000)26 (26 days per month are taken as working days and not 30 or 31)
= 270
Hence for 25 EL it is 25*270 = Rs,6750
Priya