Work out leave encashment instantly with clear inputs, formula shown and shareable results.
Leave encashment is paid at basic salary per day for unused entitlement. On retirement or resignation a lifetime exemption cap applies, and anything above it is taxed at your marginal rate.
Leave encashment
Gross = (basic / 30) × leave days; taxable = gross - exemption cap
Tax figures are estimates based on the rates, caps and thresholds you enter. Real rules differ by jurisdiction and change every year, and personal circumstances alter the outcome. This is not tax or financial advice — confirm with a qualified adviser.
Generally no. The exemption typically applies only on retirement or separation.
Usually basic plus dearness allowance, averaged over the last months of service under statutory rules.