Free Leave Encashment Calculator
Calculate encashment amount for pending earned leaves.
Quick answer
Leave encashment = (Basic + DA) ÷ 26 × unused earned leave days. Some employers divide by 30 instead. Example: Basic + DA of ₹30,000 and 20 unused days gives ₹30,000 ÷ 26 × 20 = ₹23,077. Leave encashed at retirement or resignation is tax-free for private-sector employees up to ₹25 lakh over their career (Section 10(10AA)); leave encashed while still in service is fully taxable.
Last reviewed November 2026.
How to use the Leave Encashment Calculator
Fill in these fields and the leave encashment calculator works out the rest instantly, in your browser:
- Basic + DA Salary (₹/month)
- Number of Pending Earned Leaves
- Calculation Basis (26 Working Days/Month / 30 Calendar Days/Month)
Worked example
With Basic + DA Salary: 50000; Number of Pending Earned Leaves: 30; Calculation Basis: 26 Working Days/Month:
| Basic Salary per Month | ₹50,000 |
| Daily Rate | ₹1,923 |
| Pending Leaves | 30 days |
| Leave Encashment Amount | ₹57,692 |
| Tax-Free Limit at Exit (Non-Govt) | ₹25,00,000 |
At retirement or resignation, encashment is fully tax-free for government employees and tax-free up to ₹25 lakh for others (Sec 10(10AA)). Encashment while in service is taxable.
Frequently asked questions
What is the formula for leave encashment in India?
Leave encashment = (last drawn Basic + DA ÷ 26) × number of unused earned leaves. If your policy uses 30 days, divide by 30. Only earned or privilege leave is usually encashable; casual and sick leave usually lapse.
Is leave encashment taxable?
Encashment while you are still employed is taxable as salary. At retirement or resignation, central and state government employees are fully exempt, and other employees are exempt up to ₹25 lakh in total (raised from ₹3 lakh from 1 April 2023), subject to the 10-month average salary and 30-days-per-year limits in Section 10(10AA).
Is leave encashment paid in full and final settlement?
Yes. Unused earned leave that your policy or the state Shops and Establishments Act allows to be encashed is paid with the full and final settlement, along with pending salary and gratuity if eligible.
Can Staff Khata do this calculation automatically every month?
Yes. Staff Khata takes attendance from Realtime biometric machines, a rotating QR code or selfie + GPS punches, then works out salary, PF, ESI, advances and payslip PDFs for each employee. Payroll is on the Growth plan at ₹0.50 per employee per day.
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