Can you please clarify about yearly calculation of Earned Leave Encashment. We have taken gross salary / 26 X no. of days. Is it correct ?
From India, Hyderabad
Acknowledge(0)
Amend(0)
3From India, Hyderabad
Acknowledge(0)Amend(0)
bottom line is : Basic Salary / 26 * Nos of Earned Leave Balance. But you can take Gross Salary instead of Basic, if your company policy allowing that. thanks amit jain 9873436660
From India, Delhi
Acknowledge(0)Amend(0)
From India, Delhi
Acknowledge(0)Amend(0)
Hi there,
In order to help you calculate the encashment of annual leave, I need you to provide the following information:
- According to your Company Policy, is your annual leave calculated in calendar days or working days? This distinction is crucial when calculating.
- Different positions may have varying annual leave entitlements.
- When calculating benefits and entitlements, do you use the basic salary or gross salary? This can make a significant difference.
- What is your organization's policy on carrying forward annual leave?
- I assume you carry out this exercise by 31st December.
- Please specify the date on which you begin the calculation.
- Total number of annual leave days earned.
Please send me this information, and I will provide you with the matrix for calculating your annual leave encashment.
From Oman, Muscat
Acknowledge(0)Amend(0)
In order to help you calculate the encashment of annual leave, I need you to provide the following information:
- According to your Company Policy, is your annual leave calculated in calendar days or working days? This distinction is crucial when calculating.
- Different positions may have varying annual leave entitlements.
- When calculating benefits and entitlements, do you use the basic salary or gross salary? This can make a significant difference.
- What is your organization's policy on carrying forward annual leave?
- I assume you carry out this exercise by 31st December.
- Please specify the date on which you begin the calculation.
- Total number of annual leave days earned.
Please send me this information, and I will provide you with the matrix for calculating your annual leave encashment.
From Oman, Muscat
Acknowledge(0)Amend(0)
Dear Member,
We are not supposed to encash the earned leaves yearly under any Act. However, if the employee does not have any objection and is interested in getting encashment of EL yearly, and if the employer also wants to pay, then in my opinion, your method of calculation is not objectionable.
Opinions/comments submitted as requested.
With Regards,
R.N.Khola
From India, Delhi
Acknowledge(0)Amend(0)
We are not supposed to encash the earned leaves yearly under any Act. However, if the employee does not have any objection and is interested in getting encashment of EL yearly, and if the employer also wants to pay, then in my opinion, your method of calculation is not objectionable.
Opinions/comments submitted as requested.
With Regards,
R.N.Khola
From India, Delhi
Acknowledge(0)Amend(0)
Hi,
If the company has a policy of providing privilege leave or earned leave during the calendar year, they may opt for the same. However, the Factories Act does not insist that the employer pays such encashment. It is not a statutory obligation on the part of the employer to pay such encashment to the employee.
Regards,
Devarajan
From India, Madras
Acknowledge(0)Amend(0)
If the company has a policy of providing privilege leave or earned leave during the calendar year, they may opt for the same. However, the Factories Act does not insist that the employer pays such encashment. It is not a statutory obligation on the part of the employer to pay such encashment to the employee.
Regards,
Devarajan
From India, Madras
Acknowledge(0)Amend(0)
Dear MEMBER,
For earned leave encashment, we should take the basic salary (not gross salary) for a month with 30 days. For example, a person who has worked a total of 120 days is eligible to receive 6 days for encashment. The basic salary for a day should be determined and then multiplied by 6 days.
Basic salary Rs. 800 X 6 days = Rs. 4800/-
Boopathi.N
09894190187
From India, Coimbatore
Acknowledge(0)Amend(0)
For earned leave encashment, we should take the basic salary (not gross salary) for a month with 30 days. For example, a person who has worked a total of 120 days is eligible to receive 6 days for encashment. The basic salary for a day should be determined and then multiplied by 6 days.
Basic salary Rs. 800 X 6 days = Rs. 4800/-
Boopathi.N
09894190187
From India, Coimbatore
Acknowledge(0)Amend(0)
Please refer to the Act which is applicable to your establishment. Then, refer to your policy that pertains to leaves. If there is no company policy on leave, refer to the model standing order.
Thank you.
Yours sincerely,
Koti
From India, Coimbatore
Acknowledge(0)Amend(0)
Thank you.
Yours sincerely,
Koti
From India, Coimbatore
Acknowledge(0)Amend(0)
As per my knowledge wages/26* No of Days (PL). Here wages include BAsic+DA +other special pays. Regards, P K Prasad
From India
Acknowledge(0)Amend(0)
From India
Acknowledge(0)Amend(0)
Dear Friend basic salary/30*No of days encashment - for staff & workmen (Basic Salary+da+vda)/30*nos days encashment
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
Dear Friends,
In the case of worker earned leave calculation, the simple formula is to add all twelve months' basic pay that one has earned in a year and multiply that by 8.33%. That is, annual due salary * 8.33% = Leave Salary.
Vashishtha
From India, Velluru
Acknowledge(0)Amend(0)
In the case of worker earned leave calculation, the simple formula is to add all twelve months' basic pay that one has earned in a year and multiply that by 8.33%. That is, annual due salary * 8.33% = Leave Salary.
Vashishtha
From India, Velluru
Acknowledge(0)Amend(0)
Hai Anyone have basic exle formate to calculation for the same? Please share with us. Nirav.Parikh
From India, Vadodara
Acknowledge(0)Amend(0)
From India, Vadodara
Acknowledge(0)Amend(0)
To all Members,
With a humble request, please reply only if you know that it is correct. Don't input lines that you think are correct. Please refer to labor law first, then comment. Please take care, as one mistaken line can cause hundreds of errors, obligations, or cases! Ask freely what you want to ask; it may be only a basic question, but comment only when you know it is correct.
Manish Gupta
From India, Mumbai
Acknowledge(0)Amend(0)
With a humble request, please reply only if you know that it is correct. Don't input lines that you think are correct. Please refer to labor law first, then comment. Please take care, as one mistaken line can cause hundreds of errors, obligations, or cases! Ask freely what you want to ask; it may be only a basic question, but comment only when you know it is correct.
Manish Gupta
From India, Mumbai
Acknowledge(0)Amend(0)
Monthly Encahable Salary to be divided by 30 days to arrive at Leave Encashment payable per day. Division by 26 is correct only if rate of salary is per day. Thanks & Regards
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
Dear All, Earned leaves are calculated like this. Gross Salary/Total EL Alloted * EL Left Over for the calender year. Regs, Sanjay
From India, Hyderabad
Acknowledge(0)Amend(0)
From India, Hyderabad
Acknowledge(0)Amend(0)
Dear Manish, I am also of the same view. With Regards, R.N.Khola
From India, Delhi
Acknowledge(0)Amend(0)
From India, Delhi
Acknowledge(0)Amend(0)
Formula given by Mr. Sanjay is completely wrong. Take an example, and one will come to know what he is trying to find out - earned leaves? EL Encashment? God knows. I appeal to citehr members to post responsibly. Please post only if you are confident about the completeness and correctness of the information. Thanks & Regards
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
Dear Amit,
If you deem fit, please let us know which law (Act & section) states that we are to consider basic salary for the calculation of the amount for encashment of earned leaves.
With Regards,
R.N. Khola
Quote from amitmahaan;1096435:
Bottom line is:
Basic Salary / 26 * Number of Earned Leave Balance.
But you can take Gross Salary instead of Basic if your company policy allows that.
Thanks,
Amit Jain
9873436660
From India, Delhi
Acknowledge(0)Amend(0)
If you deem fit, please let us know which law (Act & section) states that we are to consider basic salary for the calculation of the amount for encashment of earned leaves.
With Regards,
R.N. Khola
Quote from amitmahaan;1096435:
Bottom line is:
Basic Salary / 26 * Number of Earned Leave Balance.
But you can take Gross Salary instead of Basic if your company policy allows that.
Thanks,
Amit Jain
9873436660
From India, Delhi
Acknowledge(0)Amend(0)
Earned will be calculated on the basis of Basic+DA/30*No of days earned=EL payable Nagaraj.N.K 9448886290
Acknowledge(0)Amend(0)
Acknowledge(0)Amend(0)
Dear Friends When we calculate leave encashment how is the PF amount which has been contributed by the company to be adjusted. Gita
From India, Bangalore
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)
Hi Deepthi,
Earned leaves are normally calculated with the last earned basic + DA (if the company provides) + any commission provided by the company upon a fixed percentage of turnover. Divide this by 30 to get one day EL encashment. You may refer to this site IndiaTaxes.com for more information.
<link updated to site home> (Search On Cite | Search On Google)
Regards,
Kannan R
From India, Bangalore
Acknowledge(0)Amend(0)
Earned leaves are normally calculated with the last earned basic + DA (if the company provides) + any commission provided by the company upon a fixed percentage of turnover. Divide this by 30 to get one day EL encashment. You may refer to this site IndiaTaxes.com for more information.
<link updated to site home> (Search On Cite | Search On Google)
Regards,
Kannan R
From India, Bangalore
Acknowledge(0)Amend(0)
Earned leave will be calculated as = Basic/30*No. of earned EL. There is no role of DA while calculation total amount of earned leave.
From India, Noida
Acknowledge(0)Amend(0)
From India, Noida
Acknowledge(0)Amend(0)
Dear All, Calculation of Earned Leave should be on Gross Salary of 26 days. Formula should be for encashment of Leave = Gross Salary * No. of Earned Leave during the period/26. ANKUR RASTOGI
From India, New Delhi
Acknowledge(0)Amend(0)
From India, New Delhi
Acknowledge(0)Amend(0)
factories act clearly states wages including all allowamces need to be paid. The labor acts do not recognize the term basic salary.
From India, undefined
Acknowledge(0)Amend(0)
From India, undefined
Acknowledge(0)Amend(0)
As per the Factory Act, EL is earned as follows: for every 20 work days, 1 EL is earned. It is applicable to avail the same in the next calendar year or after 240 days in the same calendar year. EL is accumulated up to 30 or more, depending upon state rules (different states have different numbers). It is encashed at the present basic salary.
Acknowledge(0)Amend(0)
Acknowledge(0)Amend(0)
There is not such a universal rule. Normally if someone is getting his/her EL cncashed, it is calculated on basic salary. i.e. Basic salary/26*multiplied by no. of ELs.
Acknowledge(0)Amend(0)
Acknowledge(0)Amend(0)
Hi there,
I am sharing the details as per the current practice in my company. The calculation of Earned Leave (EL) is based on the salary eligible for EL, which includes Basic, Dearness Allowance (DA), and House Rent Allowance (HRA). The formula is: salary eligible for EL / 26 * number of EL days payable.
Hope this information is helpful to you!
Regards,
Prem Soni
From India, Alwar
Acknowledge(0)Amend(0)
I am sharing the details as per the current practice in my company. The calculation of Earned Leave (EL) is based on the salary eligible for EL, which includes Basic, Dearness Allowance (DA), and House Rent Allowance (HRA). The formula is: salary eligible for EL / 26 * number of EL days payable.
Hope this information is helpful to you!
Regards,
Prem Soni
From India, Alwar
Acknowledge(0)Amend(0)
Dear Soni,
You are lucky that your company has a practice of adding HRA to the salary for EL calculation. Otherwise, for EL calculation, the salary is meant to be Basic Salary + DA. The calculation should be: (Basic + DA / 26 * No. of EL).
Pramod Mishra
Acknowledge(0)Amend(0)
You are lucky that your company has a practice of adding HRA to the salary for EL calculation. Otherwise, for EL calculation, the salary is meant to be Basic Salary + DA. The calculation should be: (Basic + DA / 26 * No. of EL).
Pramod Mishra
Acknowledge(0)Amend(0)
HR_Pramod - If a person is in service and avails EL, then he gets full/gross salary. Similarly, for full and final settlement, EL should be calculated per Gross/full salary. The above is per Chapter VII of the Factories Act.
The company's policy, procedure, or past practice does not have legitimacy over the Factories Act. Are you aware of any clause or court judgment to support payment of only the basic salary in lieu of earned leave? Request to share.
Regards,
Navin
From India, undefined
Acknowledge(0)Amend(0)
The company's policy, procedure, or past practice does not have legitimacy over the Factories Act. Are you aware of any clause or court judgment to support payment of only the basic salary in lieu of earned leave? Request to share.
Regards,
Navin
From India, undefined
Acknowledge(0)Amend(0)
Dear friend,
The earned leave calculation is regulated by the Factories Act of 1948 and its State Rules. If any organization wishes to provide additional benefits to its employees, the calculation and payment would be made according to the organizational policy.
Regards, V K Sharma
From India, Delhi
Acknowledge(0)Amend(0)
The earned leave calculation is regulated by the Factories Act of 1948 and its State Rules. If any organization wishes to provide additional benefits to its employees, the calculation and payment would be made according to the organizational policy.
Regards, V K Sharma
From India, Delhi
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
LEAVE ENCASHMENT NOT INCLUDED IN WAGES FOR P. F. CALCULATION.pdf
Leave Encashment & Salary Calculation.xls x