Leave Encashment [Thread 6199]

Hi, Leave encashment in my company is done for example The arrears paid leave encashment of 5.5 days . Details are: As per the formula: 50% of your gross or 3 times of your basic which ever is less. 1. 50% of your gross is Rs.22200/- 2. 3 times of basic - Rs.5000 x 3 = 15000/- 3. So 15000/31 x 5.5 days = 2661/- Is this right?? We have employee asking for leave encashment like this i.e ( (15000 * 12) / 365 ) Although I know the difference very less!! Is this right? How is calculate in IT industry. Please let know ASAP. Regards Anuradha

Hi Anuradha, I have not seen this formula. Could you refer the act / rule where it has been define. Normally leave encashment is being done by two types (a) Mostly - Basic/26*no of days leave to be encashed (b) Very less - Gross salary/30*nof of days leave to be encahed regards/Dabas

Anuradha, I feel the following method will be good to implement: Encashment may be based on the emolument one is getting. Emolument means Basic plus DA (if applicable). All other allowances should not be taken into consideration while calculating the leave encashment. Regular employees may be given encashment in the following format: emolument X No. of days to be encashed ---------------------------------------------- 30 (days) Ajay

Ajaysimhan, We also calculate in the same way in our organisation.One more thing is PF calculated on the amount such arrived at ? Regards, Padmini.

Dear Anuradha, The below formula is correct. Basic/26*no of days leave to be encashed and more over PF also deduct form this amount Mohan

The normal practice to encash the Leaves is as under. Basic / 26 * No. of Days. Hope this would suffice your requirement. regards, NELLY_BAVA

HI, NORMALLY THE CALCULATION PART OF EL ENCASHMENT INVOLVE THE FOLLOWING BASIC/26 * NO OF DAYS. MOSTLY COMPANIES FOLLOW THIS PROCEDURE ONLY. KIRAN

Hye Everybody In our Company We do like this If u have 5 days Balance of Leave Basic + DA = Total , Perday Sal , Total Payable , PF 12%, Net payable is 927.39 5000 + 1534 = 6534 , 210.77 , 5 * 210.77 = 1053.85 , 126.46 Regards Reena

Dear Anuradha, The above procedure is correct & PF also has to be deducted on the same. Regards, Pooja

hi anuradha, Yes, i believe Krisnamohan is right. leave encashment is done on basic *no. of leaves/ 26 or 22 days depending on whether the company works for5 or 6 days in a week, and we have to deduct the p.f from the same.