# Free Leave Encashment Calculator

> Calculate encashment amount for pending earned leaves. Free, no sign-up, by Staff Khata.

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.

## Inputs

- Basic + DA Salary (₹/month)
- Number of Pending Earned Leaves
- Calculation Basis

## 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.

Use the calculator: https://staffkhata.com/free-tools/leave-encashment-calculator