Dear Seniors, I need clarity on the encashment of Paid Leaves in F&F. Do we need to calculate based on the basic or on gross salary? Suppose the gross salary of an employee is 25,000, and he has 20 paid leaves upon exit. In F&F, do we need to pay him 16,667 ((25,000/30)*20) or 6,667 ((45%*25,000)/30)*20)? Please suggest.
Thanks,
Raam
From India, Bangalore
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1Thanks,
Raam
From India, Bangalore
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Depends on company policy, but it is basically calculated based on the basic salary. The formula for earned leave encashment is: Basic Salary / 26 * Number of Earned Leave Balance. However, you can use Gross Salary instead of Basic if your company policy allows that.
From India, Delhi
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From India, Delhi
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Leave encashment is generally calculated based on the gross salary of any employee. The formula for calculating leave encashment is Gross Salary * Number of earned leaves / 30. I recommend checking with your management regarding the leave encashment policy.
Thank you.
From India, Hyderabad
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Thank you.
From India, Hyderabad
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LEAVE ENCASHMENT NOT INCLUDED IN WAGES FOR P. F. CALCULATION.pdf
Leave Encashment & Salary Calculation.xls x