Leave Encashment Calculator
Cash for unused leave and how much is tax-free.
For the exemption, at most 30 days per year of service count.
When encashed
Employer
Optional
Your result
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Enter your numbers to see the result.
This leave encashment calculator shows how much you get for your unused earned leave and how much of it is tax-free. Enter your basic pay and DA, leave balance and service. For non-government employees leaving at retirement or resignation, it applies all four exemption limits, including the ₹25 lakh lifetime cap.
What is a Leave Encashment Calculator?
Leave encashment is the cash payment an employer makes for earned leave you did not take. Many companies allow it at retirement or resignation, and some allow it during service. The amount is usually based on your basic pay and DA for each unused day.
For non-government employees, leave encashed at retirement or resignation is tax-free up to the lowest of four limits: the amount received, ₹25 lakh over your lifetime, 10 months’ average salary, and the value of unused leave counting at most 30 days per year of service. Government employees’ retirement encashment is fully exempt. Leave encashed during service is taxable. This leave encashment calculator applies these rules.
How does the Leave Encashment Calculator work?
The calculator divides average monthly basic plus DA by 30 or 26, as your employer does, and multiplies by unused leave days. For the exemption, it calculates the four limits and takes the lowest.
The leave limit counts at most 30 days of leave per completed year of service, minus leave already taken, valued at the average salary.
How to use the Leave Encashment Calculator step by step
- Enter the average basic plus DA for the last 10 months.
- Enter your unused leave days.
- Choose your employer’s day basis.
- Enter service years, leave credited per year and leave already taken.
- Choose when it is encashed and the employer type.
- Read the amount and tax-free part.
Leave Encashment Calculator example with real numbers
You retire from a private company after 25 years with 300 days of unused leave, having taken 450 days of leave during service. Your average basic plus DA over the last 10 months was ₹80,000, and your employer pays on a 26-day month.
| Example input | Value |
|---|---|
| Average basic + DA | ₹80,000 a month |
| Unused leave | 300 days (employer uses 26-day month) |
| Service | 25 years |
| Leave taken | 450 days |
| Employer | Private, at retirement |
| Example output | Value |
|---|---|
| Leave encashment amount | ₹9,23,077 |
| Tax-free part | ₹8,00,000 |
| Taxable part (added to salary) | ₹1,23,077 |
| 1. Amount received | ₹9,23,077 |
| 2. Lifetime limit left | ₹25,00,000 |
| 3. 10 months of average salary | ₹8,00,000 |
| 4. Unused leave value (max 30 days a year) | ₹8,00,000 |
The leave encashment calculator shows ₹9,23,077 for 300 days. The lowest of the four limits is 10 months’ salary, so ₹8,00,000 is tax-free and ₹1,23,077 is taxed as salary.
Key features of this Leave Encashment Calculator
- 30 or 26-day basis
- All four exemption limits
- ₹25 lakh lifetime limit with earlier use
- Government and private employees
- During service vs at exit
Who should use the Leave Encashment Calculator?
Who is this Leave Encashment Calculator for?
- Employees retiring or resigning
- HR and payroll teams
- Government employees checking dues
- Tax planners
Practical use cases
- Checking full and final settlement
- Estimating tax on leave encashment
- Deciding whether to take leave or encash it
- Planning retirement income
Key benefits
- Accurate: all four limits.
- Clear: tax-free and taxable split.
- Practical: employer day basis.
- Up to date: ₹25 lakh limit.
Tips for better results
- Check your company policy for the day basis and maximum encashable days.
- Keep track of exemption used in previous jobs.
- Encashment during service is fully taxable; consider taking leave instead.
- Ask HR for the 10-month average salary figure.
Common mistakes to avoid
- Using CTC instead of basic plus DA.
- Forgetting earlier exemption use.
- Expecting exemption on encashment during service.
- Counting more than 30 days a year for the exemption.
Limitations of this Leave Encashment Calculator
- Employer policies vary.
- Relief under section 89 for arrears is not included.
- Labour code changes to leave rules may affect future policies.
Leave Encashment Calculator vs other ways to calculate
| Situation | Tax treatment |
|---|---|
| Retirement/resignation, private | Exempt up to the lowest of four limits |
| Retirement, government | Fully exempt |
| During service | Fully taxable |
| Paid to legal heirs on death | Not taxable as salary |
For gratuity at the same time, use the gratuity calculator. For tax on the rest of your salary, see the income tax calculator.
Privacy and data handling
This Leave Encashment Calculator runs entirely in your browser. The numbers you type are not sent to Qorico or stored on any server, and nothing is saved after you close the page. The Copy and Download buttons create the result on your own device. If the page has analytics turned on, it may count that a calculation happened, but it does not record the values you entered.
Leave Encashment Calculator FAQs
How is leave encashment calculated?
Average monthly basic plus DA divided by 30 (or 26), multiplied by unused leave days.
What is the leave encashment exemption limit?
₹25 lakh over your lifetime for non-government employees, subject to the other three limits.
Is leave encashment during service taxable?
Yes, fully taxable as salary.
Is leave encashment exempt in the new tax regime?
Yes, the exemption at retirement or resignation is available under both regimes.
Is government employees' leave encashment taxable?
Retirement leave encashment for central and state government employees is fully exempt.
What salary is used for the 10-month average?
Basic pay plus DA (if it counts for retirement benefits) and commission based on turnover, for the 10 months before retirement.
Related tools
Sources and references
We checked the method and the current figures used in this Leave Encashment Calculator against these official and primary sources:
Written and reviewed by the Qorico Team
