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Leave Encashment
🏖 Leave Encashment Calculator
Convert unused paid leave days into their cash equivalent, based on your basic salary and how many working days your company counts per month.
Leave encashment received during employment is generally taxable as salary income; amounts received at retirement or resignation have separate tax-exemption rules with a cap (currently ₹3 lakh for non-government employees) on the exempt portion.
Frequently Asked Questions
Is leave encashment always taxable?
Leave encashment during service is fully taxable as salary. At retirement or resignation, a portion is exempt (subject to a statutory cap) — government employees typically get full exemption, while private-sector employees have a capped exemption.
Why does 'Working Days/Month' affect the calculation?
It sets the daily rate — basic salary divided by working days per month — which then multiplies by your unused leave balance to get the encashment value; companies commonly use 26 or 30 as the divisor.
Does this include earned leave only, or also sick/casual leave?
Encashment policies vary by company — typically only earned/privilege leave is encashable, while sick and casual leave often lapse unused. Check your company's specific leave policy.
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