Leave encashment calculator

This calculator works out the cash equivalent of leave payable to a central government employee on retirement: the encashment of earned leave up to 300 days, and half pay leave used to fill the balance, on the last basic pay plus dearness allowance. It is one of the three payments a retiring employee receives, alongside the pension and the retirement gratuity, and for a government employee it is fully exempt from income tax. Enter your figures below; the result updates as you type. The formula and a worked example follow.

Calculator

Your encashment at a glance

What the calculator computes

The calculator takes four inputs: your last basic pay, the dearness allowance rate, your earned leave at credit, and your half pay leave at credit. From these it works out the cash equivalent of leave.

The first output is the per-day rate, your basic pay plus dearness allowance divided by 30. The second is the earned-leave cash equivalent, the per-day rate times your earned leave, up to 300 days. The third, where it applies, is the half-pay-leave cash equivalent, valued at half the day-rate and used only to fill the balance up to 300 days. The fourth is the total, paid once at retirement and exempt from tax for a government employee.

The formula

The cash equivalent of leave is set by Rule 39 of the CCS (Leave) Rules, 1972. For earned leave it is:

Earned-leave cash = (basic pay + dearness allowance) / 30 x days of earned leave at credit

The pay is the basic pay in your pay matrix Level as on the date of retirement, and, unlike the pension, the dearness allowance is added to it. The monthly figure is divided by 30, a fixed 30-day-month convention written into the rule, to get the pay for one day, which is multiplied by the days of earned leave, up to a maximum of 300.

Where earned leave is below 300 days, half pay leave fills the balance. Its cash equivalent is half the day-rate, because the half pay leave salary is half of basic pay, with dearness allowance on that half, times the days of half pay leave needed to reach 300. Earned leave and half pay leave together cannot exceed 300 days, and there is no reduction of pension for encashing half pay leave, the pension-equivalent deduction having been removed in 2009.

A worked example

Take an employee retiring on a last basic pay of Rs. 1,00,000 a month, with dearness allowance at 55 per cent, and 300 days of earned leave at credit.

The pay for encashment is Rs. 1,00,000 plus 55 per cent, that is Rs. 1,55,000. The per-day rate is Rs. 1,55,000 divided by 30, which is Rs. 5,166.67. The earned-leave cash equivalent is Rs. 5,166.67 times 300, which is Rs. 15,50,000, paid once and tax-free. With 300 days of earned leave, no half pay leave is needed.

Now take an employee with only 250 days of earned leave but 60 days of half pay leave. The earned leave gives Rs. 5,166.67 times 250, Rs. 12,91,667. The balance to 300 is 50 days, so 50 days of half pay leave are encashed at half the rate, Rs. 2,583.33 a day, which is Rs. 1,29,167; the remaining 10 days of half pay leave are dropped by the 300-day cap. The total is Rs. 14,20,834. A lower-paid employee, on a basic pay of Rs. 50,000 with dearness allowance at 50 per cent and 100 days of earned leave, has a per-day rate of Rs. 2,500 and a cash equivalent of Rs. 2,50,000.

Notes and scope

The calculator is for the cash equivalent of leave on superannuation or retirement and assumes the standard 300-day cap and the half-rate valuation of half pay leave. It does not compute the different entitlements on other exits: on resignation only earned leave, to the extent of half the balance and a maximum of 150 days, is paid; on death in service both earned and half pay leave up to 300 days are paid to the family; and on dismissal or removal the leave lapses. It also does not cover the separate encashment of up to 10 days of earned leave while availing Leave Travel Concession, subject to a career limit of 60 days, which does not reduce the 300-day retirement entitlement. The figure is fixed by the sanctioning authority on your leave account. For the wider retirement picture, see the central government pension article.

See also

• Central government pension
• Pension calculation
• Rule 44 pension calculator
• Commutation of pension calculator
• Gratuity for central government employees
• Gratuity calculator
• Take-home salary for central government employees
• Dearness allowance
• Old Pension Scheme
• National Pension System
• Unified Pension Scheme
• Income tax for government employees
• 7th Central Pay Commission
• Central government employees in India

External references

• Department of Personnel and Training
• Department of Pension and Pensioners’ Welfare
• Income Tax Department