# Payment of leave encashment process **URL:** \ **Category:** Leave\ **Tags:** leavebalance, encash, payment\ **Created:** [December 31, 2020, 5:47am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604 "2020-12-31T05:47:08Z")\ **Posts on this page:** 11\ **Page:** 1
**Author:** ![Mugdhavn13](https://avatars.discourse-cdn.com/v4/letter/m/eada6e/32.png) [@Mugdhavn13](https://community.greythr.com/u/Mugdhavn13)\ **Post date:** [December 31, 2020, 5:47am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/1 "2020-12-31T05:47:08Z")
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? ---
**Author:** ![pelatro](https://avatars.discourse-cdn.com/v4/letter/p/5f8ce5/32.png) [@pelatro](https://community.greythr.com/u/pelatro)\ **Post date:** [December 31, 2020, 6:18am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/2 "2020-12-31T06:18:05Z")
Hi Mugdha Leave encashment should done on the last drawn basic or ctc as per your company policy. ---
**Author:** ![C0025](https://avatars.discourse-cdn.com/v4/letter/c/ecccb3/32.png) [@C0025](https://community.greythr.com/u/C0025)\ **Post date:** [December 31, 2020, 6:22am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/3 "2020-12-31T06:22:55Z")
After Hike only ![image001.jpg](https://us1.discourse-cdn.com/flex024/uploads/greytip1/original/1X/24bd487e14ccfa2177874e948b4a00300e826383.jpeg) ---
**Author:** ![Mugdhavn13](https://avatars.discourse-cdn.com/v4/letter/m/eada6e/32.png) [@Mugdhavn13](https://community.greythr.com/u/Mugdhavn13)\ **Post date:** [December 31, 2020, 6:40am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/4 "2020-12-31T06:40:38Z")
Okay. Thank you for your helpful reply. ---
**Author:** ![Ankit](https://sea2.discourse-cdn.com/flex024/user_avatar/community.greythr.com/ankit/32/1201_2.png) [@Ankit](https://community.greythr.com/u/Ankit)\ **Post date:** [January 2, 2021, 4:46am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/5 "2021-01-02T04:46:46Z")
Leave Encashment, Gratuity is always calculated on Last Drawn Salary only ---
**Author:** ![Dinesh](https://avatars.discourse-cdn.com/v4/letter/d/a8b319/32.png) [@Dinesh](https://community.greythr.com/u/Dinesh)\ **Post date:** [January 4, 2021, 3:47am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/6 "2021-01-04T03:47:11Z")
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. ---
**Author:** ![Bharath](https://sea2.discourse-cdn.com/flex024/user_avatar/community.greythr.com/bharath/32/249_2.png) [@Bharath](https://community.greythr.com/u/Bharath)\ **Post date:** [January 19, 2021, 3:58am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/7 "2021-01-19T03:58:29Z")
It will be done on the last drawn salary ---
**Author:** ![Vidyaranjan](https://avatars.discourse-cdn.com/v4/letter/v/858c86/32.png) [@Vidyaranjan](https://community.greythr.com/u/Vidyaranjan)\ **Post date:** [February 18, 2022, 11:39am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/8 "2022-02-18T11:39:29Z")
Split this topic on February 18, 2022, 11:39am UTC 6 posts were split to a new topic: [Calculating Leave encashment based on last drawn basic pay or last drawn Fixed gross salary, which is correct?](https://community.greythr.com/t/calculating-leave-encashment-based-on-last-drawn-basic-pay-or-last-drawn-fixed-gross-salary-which-is-correct/4073) ---
**Author:** ![nandakumar](https://avatars.discourse-cdn.com/v4/letter/n/58956e/32.png) [@nandakumar](https://community.greythr.com/u/nandakumar)\ **Post date:** [February 19, 2022, 2:43pm UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/9 "2022-02-19T14:43:13Z")
Hi Guys, Please enlighten me regarding Tax exemption on Leave encashment for the below (Private Sector). 1. Leave encashment after resignation 2. Leave encashment at the time of retirement ---
**Author:** ![suresh.p](https://avatars.discourse-cdn.com/v4/letter/s/7ea924/32.png) [@suresh.p](https://community.greythr.com/u/suresh.p)\ **Post date:** [February 19, 2022, 3:15pm UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/10 "2022-02-19T15:15:08Z")
Hello Nanda, - Leave encashment exemption is applicable for resigned & retirement employees. - If employee worked 5 companies, exemption up to 3 lakhs exemption. Exemption is considered based on the below scenario. 1. Actual amount received. 2. Average Salary of 10 months 3. Maximum limit 3,00,000 ---
**Author:** ![nandakumar](https://avatars.discourse-cdn.com/v4/letter/n/58956e/32.png) [@nandakumar](https://community.greythr.com/u/nandakumar)\ **Post date:** [April 6, 2022, 10:49am UTC](https://community.greythr.com/t/payment-of-leave-encashment-process/1604/11 "2022-04-06T10:49:57Z")
Thank you valuable feedback