Leave Encashment Calculator

Calculate the value of your unused leave and how much of it is tax-exempt when you retire or resign.

What is the Leave Encashment Calculator?

Leave encashment is the payment for accumulated earned or privilege leave. It is fully taxable while in service, but partly exempt on retirement or resignation under Section 10(10AA).

How does it work?

Encashment = (basic + DA ÷ 30 or 26) × leave days. For non-government employees, the exempt amount is the least of the amount received, ₹25 lakh, 10 months’ average salary, and cash equivalent of leave at 30 days for every completed year of service.

Formula

Encashment = Daily salary × Leave days
Exempt = min(Actual, ₹25L, 10 × Avg salary, Leave credit value)

Example

45 days on ₹60,000 basic (30-day basis) is ₹90,000, fully exempt at retirement after 15 years.

Frequently asked questions

What average salary is used?

Tax rules use the average of the last 10 months’ basic + DA (and commission linked to turnover). This calculator uses your current monthly figure.

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