Leave Encashment Calculator
Calculate leave encashment and the tax-free amount for non-government employees in India.
About the Leave Encashment Calculator
Enter your monthly basic plus DA, unused leave days, years of service and average salary over the last 10 months. The calculator gives the encashment amount and how much is tax-free on retirement or resignation.
Unused earned leave is paid out at salary ÷ 30 per day. On retirement or leaving a job, a non-government employee's exemption is the least of: the amount received, ₹25 lakh (from April 2023), 10 months' average salary, and the cash value of leave at up to 30 days per year of service. Central and state government employees are fully exempt.
The formula
Encashment = (basic + DA) ÷ 30 × days
Worked example
₹60,000 a month, 120 days of leave, 15 years of service, ₹58,000 average salary
- Encashment: 60,000 ÷ 30 × 120 = ₹2,40,000
- Lowest exemption limit: 120 days at the average salary = ₹2,32,000
- ₹8,000 is taxable
Questions people ask
Is the ₹25 lakh limit per employer?
It's a lifetime limit across all employers.
Is leave encashment in service taxable?
Yes, as salary.