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Leave encashment calculator
Got earned leave left when you resign? Work out what it’s worth in your full and final settlement, and how much tax you’ll pay on it.
Leave encashment
₹60,000
₹60,000 of it tax-free
- Pay per leave day
- ₹2,000
- Tax-free
- ₹60,000
- Taxable
- ₹0
- Leave encashment
- ₹60,000
Private-sector employees: tax-free up to ₹25 lakh over your whole career, less any exemption used before. Uses your current salary as the 10-month average.
Using your leave balance to join sooner? Get your resume ready for the next role.
Check my resume — freeHow leave encashment is calculated
Leave encashment = (monthly basic + DA ÷ 30) × unused earned leave days. With ₹60,000 a month and 30 days of leave, that’s ₹2,000 × 30 = ₹60,000. Some companies divide by 26 working days, which pays more per day — check your leave policy.
Usually only earned or privilege leave can be encashed, not casual or sick leave, and many companies cap how many days you can carry forward or encash.
Is leave encashment taxable?
While you’re still working, encashed leave is taxed in full as salary. When you resign or retire, private-sector employees get part of it tax-free: the least of the amount received, 10 months’ average salary, leave of up to 30 days for every completed year valued at salary ÷ 30, and₹25 lakh. The ₹25 lakh limit applies over your whole career, across employers.
Government employees’ leave encashment on retirement is fully tax-free.