Leave Encashment of Central Government Employees Calculator: The manner of computing earned leave encashment is distinct for both private and public sector employees. The government has devised a specific framework in line with the recommendations of the 7th pay commission, to determine the quantum of leave encashment. Yet, for staff employed under state governments, this framework may be subject to changes.
| Tool Name | Leave Encashment Calculator |
| Beneficiaries | Central Govt Employees |
| Published | July 2017 |
| Updated | July 2021 |
| Calculation Method | As per CCS Leave Rules |
| Input Details | Pay Level, Basic Salary, DA, No of EL and HPL |
| Output Details | Encashment for EL and HPL and Total |
Civilian and Defence personnel are granted Earned Leave (EL) or Leave on Average Pay (LAP) annually. Civilian employees receive 30 days of EL, while Defence personnel receive 60 days. EL can be accumulated up to 300 days and can be encashed with Leave Travel Concession (LTC). However, there are proposals to increase the accumulation limit to 450 days and allow encashment of 50% of the accumulated EL after 20 years of service. Additionally, employees may be able to gift a certain number of leave days to their spouse or colleague. Teachers and principals have requested the restoration of 10 days EL, which was replaced by 20 days of Half Pay Leave under VI CPC.
Government employees are granted Half Pay Leave (HPL) or Leave on Half Average Pay (LHAP) for 20 days per completed year of service, with 10 days credited on the 1st of January and 1st of July each year. Some have requested that HPL encashment be allowed upon superannuation. However, the 7th CPC Report finds these demands to be without merit. The report recommends that the 20 days HPL granted to “Vocational” staff be converted into 10 days EL, meaning that HPL will no longer be available to them. No other changes are suggested.
Leave Encashment permitted at the time of retirement:
*Excludes 60 days EL encashment during LTC
The 7th Pay Commission Report has analyzed the leave policies prevalent in various organizations and has made recommendations accordingly. While many organizations encourage employees to take leave for their well-being, the government sector in India does not have such a system. However, substituting leave with cash is not a desirable option either. Therefore, the report does not recommend any changes in the encashment guidelines.
The report acknowledges that Earned Leave is earned by an employee through their services and is personal to them. Hence, the concept of “gifting” leave cannot be considered. The demand for “Vocational” staff to be granted 10 days EL in place of 20 days Half Pay Leave has been agreed upon and recommended. However, no other changes have been suggested.
The report notes that serving employees are entitled to encashment of Earned Leave up to 60 days while in service, which is not to be deducted from the maximum number of Earned Leave of 300 days encashable at the time of retirement. The VI CPC has further liberalized the regime of leave encashment.
The recommendations made in relation to pay of both civilian and defense forces personnel will lead to a significant increase in the pay drawn and therefore in the total amount of leave encashment available for an employee. However, the Commission does not recommend raising the present ceiling of 300 days. The demands made by some lack merit, and no other changes are recommended.
Leave encashment is a common practice among government servants who avail of LTC. Ideally, the sanctioning of leave encashment should be done in advance, at the time of sanctioning the LTC. However, in deserving cases, ex-post facto sanction of leave encashment on LTC may be considered by the sanctioning authority within the time limit prescribed for submission of claims for LTC.
Government servants who are entitled to avail of LTC may encash earned leave up to 10 days at the time of availing both types of LTCs, i.e., ‘Hometown’ and ‘Anywhere in India’. However, if the same LTC is being availed of by the government servant and his family members separately in a block year, encashment of leave would be restricted to one occasion only.
In terms of 38-A of CCS(Leave) Rules, encashment of EL along with LTC is to be calculated on pay admissible on the date of availing LTC and DA admissible on that date. If pay or DA admissible has been revised with retrospective effect, going by the rule, the government servant would be entitled to encashment of Leave on the revised rates.
When determining the limit of leave encashment upon an employee’s retirement or superannuation from the Central Government, it is worth considering whether State Governments, PSUs, and Autonomous Bodies allow earned leave encashment to their employees before joining the Central Government. The ceiling of 300 days of earned leave to be encashed as per CCS (Leave) Rules need not take into account the encashment of EL allowed by State Governments, Public Sector Undertakings/Autonomous Bodies for services rendered therein. In the case of permanent absorption in PSU/Autonomous Body, it is worth considering whether cash equivalent of leave salary is permissible. A Government servant who has been permitted to be absorbed in a Corporation/Company wholly or substantially owned or controlled by the Central/State Government shall be granted cash equivalent of leave salary of earned leave at his credit on the date of absorption subject to a maximum of 300 days (being calculated as per provisions of rule 39)
It is often questioned whether a government employee who is under suspension or facing disciplinary or criminal proceedings can receive leave encashment upon their superannuation. According to Rule 39(3) of CCS (Leave) Rules, 1972, leave encashment may be allowed in such cases, but it can also be withheld if there is a possibility of the employee owing money to the government upon the conclusion of the proceedings. If this is the case, the employee will receive the withheld amount after any government dues have been settled.
However, if a government employee is dismissed or removed from service, they are no longer entitled to any leave encashment. Rule 9(1) states that an employee who is dismissed or removed from service forfeits any leave credits they may have had. Therefore, they cannot claim any leave encashment.
Payment of interest on leave encashment dues is not provided for in the CCS (Leave) Rules 1972. Therefore, delayed payment of such dues does not attract any interest.
How is earned leave encashment calculation while retirement?
Calculating earned leave encashment during retirement involves a simple formula. To determine the amount of leave encashment, you can use the following formulas: for earned leave, [(Basic Salary + DA) / 30] x No of days, and for half pay leave, [(Half Pay Leave Salary + DA) / 30] x No of days. These formulas will help you calculate the exact amount of leave encashment you are entitled to receive.
7th Central Pay Commission Recommendations on Encashment and Accumulation of Earned Leave – Click to read more
Earned leave settlement calculation Example: The Encashment Table of 300 days Earned Leave for the pay matrix level – 6 (4200 Grade Pay):
| Earned Leave Encashment Table for 300 Days | ||||
| 7 th Pay Matrix Level -6 (GP-4200) | ||||
| Index | Basic Salary | 17% DA | BP + DA | 300 EL |
| 1 | 35400 | 6018 | 41418 | 414180 |
| 2 | 36500 | 6205 | 42705 | 427050 |
| 3 | 37600 | 6392 | 43992 | 439920 |
| 4 | 38700 | 6579 | 45279 | 452790 |
| 5 | 39900 | 6783 | 46683 | 466830 |
| 6 | 41100 | 6987 | 48087 | 480870 |
| 7 | 42300 | 7191 | 49491 | 494910 |
| 8 | 43600 | 7412 | 51012 | 510120 |
| 9 | 44900 | 7633 | 52533 | 525330 |
| 10 | 46200 | 7854 | 54054 | 540540 |
| 11 | 47600 | 8092 | 55692 | 556920 |
| 12 | 49000 | 8330 | 57330 | 573300 |
| 13 | 50500 | 8585 | 59085 | 590850 |
| 14 | 52000 | 8840 | 60840 | 608400 |
| 15 | 53600 | 9112 | 62712 | 627120 |
| 16 | 55200 | 9384 | 64584 | 645840 |
| 17 | 56900 | 9673 | 66573 | 665730 |
| 18 | 58600 | 9962 | 68562 | 685620 |
| 19 | 60400 | 10268 | 70668 | 706680 |
| 20 | 62200 | 10574 | 72774 | 727740 |
| 21 | 64100 | 10897 | 74997 | 749970 |
| 22 | 66000 | 11220 | 77220 | 772200 |
| 23 | 68000 | 11560 | 79560 | 795600 |
| 24 | 70000 | 11900 | 81900 | 819000 |
| 25 | 72100 | 12257 | 84357 | 843570 |
| 26 | 74300 | 12631 | 86931 | 869310 |
| 27 | 76500 | 13005 | 89505 | 895050 |
| 28 | 78800 | 13396 | 92196 | 921960 |
| 29 | 81200 | 13804 | 95004 | 950040 |
| 30 | 83600 | 14212 | 97812 | 978120 |
| 31 | 86100 | 14637 | 100737 | 1007370 |
| 32 | 88700 | 15079 | 103779 | 1037790 |
| 33 | 91400 | 15538 | 106938 | 1069380 |
| 34 | 94100 | 15997 | 110097 | 1100970 |
| 35 | 96900 | 16473 | 113373 | 1133730 |
| 36 | 99800 | 16966 | 116766 | 1167660 |
| 37 | 102800 | 17476 | 120276 | 1202760 |
| 38 | 105900 | 18003 | 123903 | 1239030 |
| 39 | 109100 | 18547 | 127647 | 1276470 |
| 40 | 112400 | 19108 | 131508 | 1315080 |
Calculating Earned Leave Encashment under the 7th CPC: The calculation of gratuity and cash payment in lieu of leave for central government employees who retired between January 2020 and June 2021 is now available for download in a PDF format from the Finance Ministry’s OM dated 07.09.2021. Click here to access it.
Leave encashment is a significant retirement benefit for employees in both the government and private sectors. Upon retirement, employees receive a lump sum amount for the leave they have saved throughout their service. In addition, central government employees are eligible for another leave encashment opportunity while on Leave Travel Concession (LTC).
The encashment of earned leave during retirement is calculated at 300 days (with a shortfall of EL from HPL), while the encashment of earned leave during LTC is calculated at 10 days (out of 60 days throughout their career). This information is crucial for employees to understand their retirement benefits and plan accordingly.
As per Rule 39 of the CCS (Leave) Rules, 1972, a Central Government servant is entitled to the cash equivalent of leave salary for both earned leave and half-pay leave at his or her credit on the date of retirement, subject to a maximum of 300 days including the period of encashment allowed in the previous employment under the Central Government. In case a Government servant resigns or quits service, the maximum encashment of leave allowed is 150 days.
Would you mind elaborating on the concept of leave encashment in government services? Essentially, it is a customary procedure that enables government workers to convert their unused leave into monetary compensation. The sum of money received is contingent upon the number of days of leave that are relinquished.
It is noteworthy that a public employee working in the central sector has the provision to amass a maximum of 300 days of earned leave (EL) in their account.
Calculating Leave Encashment in Central Govt Services involves a simple formula. First, add the Basic salary and Dearness Allowance, then divide the sum by 30. Next, multiply the quotient by the number of days of Earned Leave, which should not exceed 300 days. If there are not enough Earned Leave days, Half Pay Leave can be used for calculation purposes, as long as it does not exceed 300 days. This method ensures accurate and fair calculation of Leave Encashment for Central Govt Services employees.
May I inquire about the method to compute earned leave encashment? Kindly furnish me with the corresponding equation utilized for this purpose. The following formula is applicable to Central Government employees: [(Basic Salary + Dearness Allowance) ÷ 30] x No of EL. For a more comprehensive explanation, you may access the link provided.
Do you happen to know the precise method for computing the encashment of Half Pay Leave? If not, let me enlighten you with the following calculation formula, which is specifically designed for Central Government employees. To determine the encashment of Half Pay Leave, simply apply this formula: [(Half Pay Leave Salary + Dearness Allowance) / 30] x No of HPL. For a more comprehensive understanding, feel free to click on the link provided.
When one retires or leaves a company, they may wonder if they need to pay taxes on their Leave Encashment. The good news is that any leave salary received during the year of retirement or departure is not subject to taxation. However, if the leave salary was received in the previous year, it is taxable. It’s important to note that the Dopt Order dated 7.11.2006 grants accumulation and encashment of 300 days of earned leave for Defence and other Industrial employees.
