Calculation Method with Formula for Encashment of Leave

Encashment of EL and HPL Calculator for Central Government Employees

The formula for encashment of leave is as follows: the cash equivalent will be the pay and dearness allowance that is admissible on the date when the Leave Travel Concession is availed, divided by 30, multiplied by the number of days of earned leave subject to a maximum of 10 days at one time. The cash equivalent calculation under sub-rule (2) does not include House Rent Allowance. The period of earned leave encashed is not to be subtracted from the amount of leave that the Government servant can typically encash under Rules 6,39,39-A, 39-B, 39-C and 39-D. If the Government servant does not utilize the Leave Travel Concession within the time frame specified under the Central Civil Services (Leave Travel Concession) Rules, 1988, then they will be asked to return the entire amount of leave encashed along with interest at a rate of two percent above the rate of interest allowed by the Government for Provident Fund balances. The Government servant shall also be entitled to get credit back for leave that was debited for leave encashment.

Encashment of Leave Formula

Cash equivalent = Pay admissible on the date of availing of the Leave Travel Concession plus Dearness Allowance admissible on that date / 30 x Number of days EL subject to the maximum 10 days at one time

The cash equivalent of leave salary under Clause (a) shall be calculated as follows and shall be payable in one lumpsum as a one-time settlement:

Cash equivalent for earned leave = Pay admissible on the date of retirement plus Dearness Allowance admissible on that date 30 x Number of days of unutilized earned leave at credit subject to the total of earned leave and half pay leave not exceeding 300 days

Cash payment in lieu of half pay leave component = Half pay leave salary admissible on the date of retirement plus Dearness Allowance admissible on that date 30 x  Number of days of half pay leave at credit subject to the total of earned leave and half pay leave at credit not exceeding 300 days

Note: The overall limit for encashment of leave including both earned leave and half-pay leave shall not exceed 300 days.

To make up for the shortfall in earned leave, no commutation of half-pay leave shall be permissible.]
(DOPT Notification No. 11012/1/2009- Estt. (L), dated 01.12.2009)

Cash Equivalent for Earned Leave

If you have unused earned leave and are looking to receive cash for it, there is a specific formula to follow. You will need to take your basic pay and add your dearness allowance, then divide that sum by 30. Once you have that number, you can multiply it by the number of days of unutilized earned leave to calculate the cash equivalent. This formula can help you understand exactly how much you’ll receive for your unused time off.

Cash Payment in Lieu of Half Pay Leave

Cash Payment in Lieu of Half Pay Leave is a financial arrangement where an employee receives payment for their unused half pay leave. The payment is calculated based on the employee’s half pay leave salary and dear allowance, divided by 30 days, and multiplied by the number of days of unutilized half pay leave. This calculation is done to ensure that the employee is compensated for the days of leave that they did not use, and that the employer does not lose money by paying for unused leave. This arrangement can be beneficial for both the employee and the employer, as it provides financial flexibility and encourages responsible leave management.

No. 14028/3/2011-Estt(L)
Government of India
Ministry of Personnel, P.G. and Pensions
(Department of Personnel and Training)

New Delhi, the 24th May 2011

Office Memorandum

Subject: Encashment of Leave to be granted to Government Servants on their appointment in Central Public Enterprises

The undersigned is directed to state that this Department has been receiving references from various Ministries/Departments seeking clarification regarding the entitlement to leave encashment on appointment of Government Servants in Central Public Enterprises.

2. As per DoPT OM No. 28016/5/85-Estt.(C) dated 31/1/1986, appointment of an officer in a Central Public Enterprise after acceptance of his technical resignation from Government is treated as immediate absorption. As per the terms and conditions contained in this OM, a Central Government Servant taking appointment in the Central Public Enterprises on Immediate Absorption basis was entitled to encashment of Earned Leave to his credit at the time of acceptance of his resignation from Government Service, subject to a limit of 180 days. Half Pay Leave stood forfeited. (The limit of Earned Leave which could be thus encashed was later raised to 300 days).

3. It is clarified that as per rule 39-D of the CCS (Leave) Rules, 1972, the calculation of leave encashment in case of permanent absorption in Public Sector Undertaking/Autonomous Body wholly or substantially owned or controlled by the Central/State Government will be as per rule 39(2)(b) which has been amended vide Notification GSR 170 dated 1/12/2009 to read as under:-

The cash equivalent of leave salary under Clause (a) shall be calculated as follows and shall be payable in one lumpsum as a one-time settlement:-

No commutation of Half Pay Leave shall be permissible to make up the shortfall in Earned Leave.

4. All Ministries/Departments may note for further action accordingly.

5. Hindi version will follow.

sd/-
(Zoya C.B.)
Under Secretary to the Government of India

To calculate your last drawn salary, add your basic salary, allowances, and any other benefits such as overtime pay, commission, or bonus.

The number of unused leaves that can be encashed varies depending on your organization’s policy. Some companies allow for a maximum of 15 days of encashment, while others may have different limits.

No, the formula for calculating leave encashment may differ from one organization to another. It is best to check with your HR department to understand the encashment policy and formula for your organization.