Financial Calculators
Leave Encashment Calculator
Years of unclaimed leave become a cheque at retirement. Know its size before the paperwork does.
Amount = (Basic + DA) / 30 x leave days, the standard convention; most organisations cap encashable leave at 300 days. Tax treatment depends on employer type and prevailing exemption limits; confirm for your case.
Leave is deferred salary
Earned leave that is never taken accumulates, most organisations cap it at 300 days, and is encashed at retirement or resignation at the standard rate of (Basic + DA) / 30 per day. For a senior employee, the amount is substantial and arrives exactly when a retirement plan can use it.
Tax treatment differs by employer type and prevailing exemption limits, and rules change; this calculator states the amount and leaves taxation to a current check for your case.
The convention
Amount = (Basic + DA) / 30 x leave daysWorked example: a last-drawn Basic + DA of Rs 80,000 with the full 300 days of earned leave encashes at Rs 2,667 a day, about Rs 8,00,000.
Frequently asked questions
Why divide by 30?
It is the standard convention treating a month as 30 days for the daily rate. Some organisations use 26; check your service rules and adjust mentally if so.
Is leave encashment taxable?
For government employees, encashment at retirement is fully exempt; for others, an exemption limit applies (enhanced in recent years) with the balance taxable. Rules evolve; confirm the current position for your employer type.
Should I encash leave or take it?
Financially, encashment at retirement is often at a higher salary than the years the leave was earned. But leave exists for living; encash the surplus, not your health.
What should the encashment fund?
It pairs beautifully with gratuity and DSOP as retirement seed capital. The STP calculator shows how to deploy such lumpsums calmly.
Retirement cheques deserve a plan.
Gratuity, leave encashment, DSOP: we deploy them as one coordinated corpus.