Is Leave Encashment Is Calculated On CTC ?

Please tell me whether to calculate leaves encashment on CTCV basis or basic salary.
Actually in our company we have calculated on CTC basis
We have done in this way :
Eg : CTC is Rs. 15000/-
So 15000 PEr day salary is Rs. 500
: 500*no of leaves (EL) (500*11.5 EL=5750)So we have give encashment of Rs. 5750/- to the employee
IS it correct? Please guide

Subject - Is leave encashment is calculated on CTC ?
Please tell me whether to calculate leaves encashment on CTC basis or basic salary.
Actually in our company we have calculated on CTC basis
We have done in this way :
Eg : CTC is Rs. 15000/-
So 15000 PEr day salary is Rs. 500
: 500*no of leaves (EL) (500*11.5 EL=5750)So we have given encashment of Rs. 5750/- to the employee
IS it correct? Please guide

hi Pallavi,
If your fixed monthly gross component is Rs. 15000/- then above calcuation in correct.

So its in-correct.
But we can calculate leave encashment of CTC also. ITs not complusion that we need to do it on Basic salary??

Hi
CTC is only for employer reference on how much they are spending for an employee. CTC breakup could have the EL part but not for calculation. EL has to be calculated on the fixed/Gross salary for an worker/workmen and for staff, it depends on the company's policy, it could be gross or only basic.

Normally, the leave enchasement is done on gross monthly salary only. So your calculation is right.

Thanks a lot for your views.
Can i get a evident (any website link / or any document) of the leave enchasement which is done on gross monthly salary .
So i'll get a clear picture of my query.

Hi
You can refer the Factories act 1948 section 80 which will suffice your query.