Payment of leave encashment process

Hi,

Could you tell me that if an employee has received a salary hike in the middle of the year, then his unavailed leaves encashment for the entire year will happen on the original salary offered at the time of joining or on the new salary offered after hike?

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Hi Mugdha

Leave encashment should done on the last drawn basic or ctc as per your company policy.

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After Hike only

image001.jpg

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Okay.

Thank you for your helpful reply.

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Leave Encashment, Gratuity is always calculated on Last Drawn Salary only

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Hi @Mugdhavn13

Different companies use different formulas for calculation. The general formula used by most of the companies is given below.

  1. 1 day basic salary X No of Earned Leaves

  2. (1 day basic salary + 1 day TA + 1 day DA) X No of Earned Leaves

All of these is as per the last drawn basic so it will be on the new hike amount the calculation has to be made.

Similarly for the taxation.

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It will be done on the last drawn salary

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