For calculating leave encashment, we divide monthly salary (basis +DA) by 30 and multiply with No. of earned leaves to the credit of the employee
Monthly Salary X No. Earned Leaves / 30......where is this 30 coming from? No Act prescribes this specifically
Why not Annual Salary/365 X No. of Earned leaves?
From India, Bangalore
Monthly Salary X No. Earned Leaves / 30......where is this 30 coming from? No Act prescribes this specifically
Why not Annual Salary/365 X No. of Earned leaves?
From India, Bangalore
dear Deepak the way you are calculating is wrong and the way you are suggesting is also not correct.
leave encashment has to be made as below-
Monthly salary/26 than multiply by number of leave to be encashed
now your doubt will come from where 26 has come .one day salary is equal to, monthly salary/26,
it is as per the minimum wages act .where it is mentioned how to calculate one day salary
From India, Delhi
167leave encashment has to be made as below-
Monthly salary/26 than multiply by number of leave to be encashed
now your doubt will come from where 26 has come .one day salary is equal to, monthly salary/26,
it is as per the minimum wages act .where it is mentioned how to calculate one day salary
From India, Delhi
Dear JS Malik...thanks very much...But my doubt still persists. VK SInghania (Income tax practice) book suggests the following to arrive at the exemption value of leave salary
(No of completed Years X No of Leaves Earned) - (No of leaves utilized during the employment) / 30 and Multiplied by MOnthly Salary ( Last 10 months average salary).
Here also- a month is considered as 30 days. Central Civil Service (Leave)Rules that is applicable to central govt employees also calculates it with a month as 30 days...now I am not clear why these departments prescribe this practice when no act clearly mentions.
From India, Bangalore
(No of completed Years X No of Leaves Earned) - (No of leaves utilized during the employment) / 30 and Multiplied by MOnthly Salary ( Last 10 months average salary).
Here also- a month is considered as 30 days. Central Civil Service (Leave)Rules that is applicable to central govt employees also calculates it with a month as 30 days...now I am not clear why these departments prescribe this practice when no act clearly mentions.
From India, Bangalore
Dear sirs,
If you calculate leave encashment of daily wagers, you have daily rate of wages as announced by State Govt. or total of MONTH'S Basic salary+ DA + VDA if any divided by 26.Suppose MW is Rs. 300 per day and you have to pay 10 days encashment, Answer is 300x10=Rs.3000/ and in other cited case, suppose Basic +DA is Rs. 7800 per month then for 10 days leave encashment amount payable is 7800/26x10=Rs.3000/
In case you want to calculate employees salary say your management staff's who are mostly monthly rated, say in one case if basic salary, No DA/VDA suppose it is Rs. 15,000/ per month then Rs. 15000 divided by 30 or actual number of days in month to get one day's salary.For 15000/30= Rs. 500 for one day and then multiply it by leave days.
When I was HEAD-HR , I used to calculate like this Rs.15000x12xno.of leaves divided by 365 days.365 days are days in that particular year employee is exiting.Justification was that there are 28 or29/30/31 days in 12 months of any year but days are 365 or 366 only.People were mostly observed more satisfied by the second last formula.
Regds,
RDS Yadav
Labour Laws Advisor
From India, Delhi
If you calculate leave encashment of daily wagers, you have daily rate of wages as announced by State Govt. or total of MONTH'S Basic salary+ DA + VDA if any divided by 26.Suppose MW is Rs. 300 per day and you have to pay 10 days encashment, Answer is 300x10=Rs.3000/ and in other cited case, suppose Basic +DA is Rs. 7800 per month then for 10 days leave encashment amount payable is 7800/26x10=Rs.3000/
In case you want to calculate employees salary say your management staff's who are mostly monthly rated, say in one case if basic salary, No DA/VDA suppose it is Rs. 15,000/ per month then Rs. 15000 divided by 30 or actual number of days in month to get one day's salary.For 15000/30= Rs. 500 for one day and then multiply it by leave days.
When I was HEAD-HR , I used to calculate like this Rs.15000x12xno.of leaves divided by 365 days.365 days are days in that particular year employee is exiting.Justification was that there are 28 or29/30/31 days in 12 months of any year but days are 365 or 366 only.People were mostly observed more satisfied by the second last formula.
Regds,
RDS Yadav
Labour Laws Advisor
From India, Delhi
Mr RDS Yadav
Your's 1st , 2nd , 3rd Para is very very right either u can say as per under the provisions of different statutes but last parra is confusing whether it was practices in your concern?
How one can satisfy own self with this calculation of 365 days and Why ?
More Words / lines are appreciated with ur old experiences.
Thanks
From India
Your's 1st , 2nd , 3rd Para is very very right either u can say as per under the provisions of different statutes but last parra is confusing whether it was practices in your concern?
How one can satisfy own self with this calculation of 365 days and Why ?
More Words / lines are appreciated with ur old experiences.
Thanks
From India
If you are paying wages / salary including week off then you can calculate everything based on 30 days otherwise only by 26 days.
From India, Bangalore
From India, Bangalore
In general in almost statute the payment of leave with wages or encashment and payment of over time wages will be divided by only 26 in almost all enactments. Adoni Suguresh Labour Laws Consultant
From India, Bidar
From India, Bidar
Dear All,
My query is little different from above but related to above subject of Leave encashment, I need the advise as per Factory Act
Which components( Gross or Basic+DA) are covered for leave encashment of daily wages workers, as per practise they are not entitled for leave and after completion of year or during separation end they are eligible for encashment of leave on calculation of 1/20 present. To calculate no of leave we have no issue only query is related to calculation of amount for payment of Leave encashment.
From India, Surat
My query is little different from above but related to above subject of Leave encashment, I need the advise as per Factory Act
Which components( Gross or Basic+DA) are covered for leave encashment of daily wages workers, as per practise they are not entitled for leave and after completion of year or during separation end they are eligible for encashment of leave on calculation of 1/20 present. To calculate no of leave we have no issue only query is related to calculation of amount for payment of Leave encashment.
From India, Surat
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LEAVE ENCASHMENT NOT INCLUDED IN WAGES FOR P. F. CALCULATION.pdf
Leave Encashment & Salary Calculation.xls x