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Ganesh (Manager)     04 February 2010

Leave Encashement

Dear Friend

I'm working in a Company, there is some one want to encash your previous year leave. now please forward me if any rule regarding the leave encashment. 

Thanks in Advance for your valuable suggestion.

Ganesh Arya  



 8 Replies

RAM S.PATIL (ADVOCATE)     04 February 2010

You can take leave salary as per Levae Salary Calculation/employer's Polocy. Leave salary calculated as per Calender year (january to december) & every employee has a right to take leave salary when he is no more working with previous employer.

Ganesh (Manager)     04 February 2010

But he is still in the company.

Asha Pole (Legal)     04 February 2010

Normally the leave encashment policy for most of the company is as follows

Regular employees may be given encashment in the following format:

emolument (Basic) X No. of days to be encashed / 26 (days)

And some organisation take 30 days instead of 26.

kranthi kiran (Works In Judicial Department)     04 February 2010

See the leave rules and standing orders framed by the company. The procedure of encashment of leave at credit, might be described in those rules. They vary from organisation to organisation.

Rupali (Owner)     05 February 2010

The leave encashment is depends on the Company Policy.

Some company calculating leave encashment only on Basic & some company calculating on gross salary.

So, pls refer your company policy for more details.


Sarjooram Sharma (Assistant Labour commissioner)     05 February 2010

Normally leave encashment is given when the employee leavesor resigns the establishment or his services are terminated or he is superannuated. But if the company makes the rule to give its employees leave encashment for the earned leaves of previous year, the company can do so by inserting these provisions in its standing orders or otherwise also.

2 Like

Saravana Rajan   10 February 2010

Sir, Thanks for the valuable inputs. But is there any specific law requirement which states that only basic and da has to be considered for leave encashment.

-Saravana Rajan. S

Sarjooram Sharma (Assistant Labour commissioner)     10 February 2010

Leave encashment means wages of those days shall be given. wages have been defined in payment of wages act 1936.

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