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Earned Leave (EL) Encashment Calculator

Calculate Earned Leave (EL) encashment payout on retirement or resignation based on basic pay and DA.

₹
%
days
days

Counted only up to the combined 300-day ceiling.

Daily rate
₹2,861
(Basic + DA) ÷ 30
EL encashment
₹8,58,330
300 days
HPL encashment
₹0
Ceiling already reached
Total payout
₹8,58,330

How this is calculated

Daily rate = (₹56,100 + ₹29,733) ÷ 30 = ₹2861.10

EL = ₹2861.10 × 300 = ₹8,58,330

Earned leave and half pay leave together are capped at 300 days. HPL is encashed at half the daily rate.

Earned Leave (EL) Encashment Calculator: how it works

Earned leave encashed on retirement is paid at your daily rate of basic plus dearness allowance, capped at 300 days, and is fully exempt from income tax for government employees.

The formula

Encashment = (Basic pay + DA) ÷ 30 × number of days

Capped at 300 days of earned leave
The divisor is always 30, regardless of the month

The daily rate uses 30 as the divisor by rule, not the actual number of days in the month. This is fixed and does not vary.

Worked example

Worked example · Retiring with 300 days of earned leave on ₹56,100 basic at 53% DA

Given

  • Basic pay: ₹56,100
  • DA: 53%
  • Earned leave balance: 300 days

Working

  1. 1DA amount = 56,100 × 53% = ₹29,733
  2. 2Daily rate = (56,100 + 29,733) ÷ 30 = ₹2,861
  3. 3Encashment = 2,861 × 300 = ₹8,58,330

Leave encashment: ₹8,58,330, fully tax-exempt

The 300-day ceiling

Earned leave accrues at 30 days a year, credited in two instalments of 15 days each on 1 January and 1 July. It can accumulate up to 300 days, and that is also the ceiling for encashment.

Half pay leave can be added to bring the total to 300 where earned leave alone falls short, and it is encashed at half the daily rate.

Tax treatment

  • Government employees: leave encashment on superannuation is fully exempt under Section 10(10AA)(i).
  • Private sector employees: exemption is limited, subject to a monetary ceiling.
  • Encashment while still in service is taxable for everyone, government or not.

Based on

  • CCS (Leave) Rules
  • Income Tax Act, Section 10(10AA)

Frequently asked questions

Add basic pay and dearness allowance, divide by 30 to get the daily rate, then multiply by the number of days being encashed, up to a maximum of 300.

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