Leave Encashment Calculator
Cash value of unused leave at exit — per-day salary math and the ₹25 lakh tax exemption on retirement.
Formula
Disclaimer: Indicative math using recently applicable rates and rules — verify current-year figures. Not financial or tax advice.
Disclaimer: This tool is for general informational and estimation purposes only and is not professional financial, tax, accounting or legal advice. All figures are estimates — verify with a qualified professional before making decisions. Read the full disclaimer.
Need leave encashment calculator results fast? Skip the spreadsheet and get a clear, defensible answer in one step — free, private and instant, recalculating live as you change any input.
About Leave Encashment Calculator
Unused earned leave is deferred salary, and at exit it converts to cash by a simple formula most HR portals obscure: (basic + DA) ÷ the company's divisor × days. The divisor is the quiet variable — ÷30 versus ÷22 changes the same 45 days by 36% — and policies differ on whether only basic or gross counts, and how many days max carry over (often 30-60 for private firms; 300 for government). TAX is where exits differ sharply: encashment during SERVICE is fully taxable as salary; at RETIREMENT/superannuation, non-government employees get a Section 10(10AA) exemption — least of: actual amount, ₹25 lakh lifetime cap (raised in 2023), 10 months' average salary, or the cash value of leave at 30 days/year of service. Government employees: fully exempt. Resignation has judicially been treated as 'retirement' for this purpose in several rulings — documentation matters. Strategy around it: in your final year before retirement, leave hoarding is rational (each preserved day is tax-favored cash); mid-career, encashment-while-switching is taxed at your marginal slab — so where company policy allows carry-forward or transfer-adjacent arrangements, preserving beats encashing; and verify the divisor + component definitions in your HR policy BEFORE the exit interview, because that's the one moment recalculation requests actually work.
How to use Leave Encashment Calculator
- 1Enter Basic + DA (monthly), Unused leave days (days), Company's per-day divisor into the Leave Encashment Calculator.
- 2The result is computed automatically using Encashment = (basic + DA ÷ divisor) × unused days — divisor and eligible components per company policy — there is no button to press; it updates live as you type.
- 3Change any input to model a different scenario, then use “Copy result link” to share the exact numbers.
Why use Leave Encashment Calculator?
- ✓Computes leave encashment calculator instantly with the correct formula — no spreadsheet needed
- ✓100% free and unlimited, with no sign-up, login or paywall
- ✓Runs entirely in your browser, so the figures you enter are never uploaded or stored
- ✓Shows the formula, a live worked example and references so you can defend the number
Frequently asked questions
Resignation par leave encashment taxable hai ya exempt?+
Service ke DAURAAN encashment: poora taxable. Retirement par: 10(10AA) exemption (₹25 lakh lifetime cap, least-of formula ke saath). Resignation ke case me kai court rulings ne use 'retirement' maana hai — exemption claim ho sakti hai, par employer aksar TDS kaat deta hai; ITR me claim karke refund ka rasta hota hai. Documentation aur CA-salah ke saath karein.
₹25 lakh ki exemption exactly kaise lagti hai?+
Non-government retirement par LEAST of: (1) actual encashment; (2) ₹25,00,000 (lifetime, saari naukriyon ko milakar); (3) 10 mahine ki average salary (last 10 months basic+DA); (4) 30 din/saal-of-service wali leave ka cash value. Jo sabse chhota ho utna exempt, baaki slab par. Government employees ka poora exempt hota hai.
Kya leave encashment par PF kat'ta hai?+
Nahi — Supreme Court ki established position me leave encashment PF-wages me nahi aata, isliye us par 12% PF deduction nahi hota. Gratuity ki calculation me bhi yeh nahi judta. Yeh pure cash component hai — sirf income tax ka sawaal hota hai (upar dekhe rules).
Company sirf 30 din carry-forward deti hai — baaki lapse ho jaate hain?+
Private companies me yeh policy-driven hai aur aam hai: yearly cap ke upar ke din 'lapse' ya year-end par auto-encash hote hain (taxable). Bachav: cap ke kareeb pahunchne par planned chhuttiyan lena hi behtar deal hai — lapse hua din 100% loss hai, liya hua din 100% value. Factories Act/Shops & Establishment ke minimum rules states me alag hain.
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