Leave Encashment Calculator

Short answer

Leave encashment is the daily rate (monthly Basic + DA ÷ 30) multiplied by the days encashed. On the default inputs (Basic + DA ₹60,000 and 30 days of leave) the daily rate is ₹2,000, so the encashment is ₹60,000. Check your service rules or company policy for limits.

Last checked 16 October 2026 · 1 key figure from the fact register

Key facts

Key facts on this page with their source and the date each was checked
Fact	Value	Source	Date checked
Leave encashment exemption (non-government)	₹25 lakh lifetime limit; government employees fully exempt Reported by reputable sources	GConnect: increased limit of tax exemption on leave encashment (opens in a new tab)	16 October 2026

Leave encashment converts unused earned leave into cash. The common formula divides monthly Basic + DA by 30 to get a daily rate and multiplies by the days encashed. Always check your service rules or company policy for limits.

Leave encashment value

₹60,000

Per-day rate: ₹2,000

How it is calculated

Leave encashment = (Basic + DA) ÷ 30 × days of leave
Tax treatment differs for government and private employees.

Estimates for information only; not financial, tax or legal advice.

Worked example

Example (the default inputs): Basic + DA ₹60,000 and 30 days of leave. Daily rate ₹60,000 ÷ 30 = ₹2,000. Leave encashment = ₹2,000 × 30 = ₹60,000.

Frequently asked questions

Is leave encashment taxable?

During service it is generally taxable. At retirement, Central and State Government employees receive it tax-free; private-sector exemption is limited. Check current rules.

Can I encash leave with LTC?

Central Government employees can encash up to 10 days of earned leave along with LTC.

Related perks

Sources and status

Each figure on this page comes from the fact register. What the badges mean.

Reported by reputable sourceschecked 2026-10-16
Leave encashment for non-government employees at retirement or resignation: 25 lakh lifetime limit (CBDT notification, May 2023, from 1 Apr 2023). Government employees: fully exempt
GConnect: increased limit of tax exemption on leave encashment

Pay levels and roles

Salary scenarios for the 8th Pay Commission, by level and by role. Every figure is a scenario, not an official number.

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Estimates for information only; not financial, tax or legal advice. Disclaimer.