Leave Encashment Calculator India 2026 | Leave Encashment Formula

How does this relate to the new labour codes?

Section 32 of the OSH and WC Code covers annual leave for eligible workers. Generally, adult workers earn one day for every 20 days worked, with a 180-day annual eligibility condition; special categories, joining partway through a year and separation have different provisions. This tool values a verified balance; it does not determine worker coverage or generate an attendance-based leave entitlement. Enter confirmed statutory wages where the Code applies.

Why are payout wages and tax salary separate?

The labour-code wage definition can require an allowance add-back when specified exclusions exceed the statutory threshold. Basic + DA alone may therefore be insufficient. Tax exemption uses its own salary definition and a 30-day conversion for leave credit, even if your payout uses 26 days.

How are tax-reckonable leave days calculated?

For a constant annual entitlement: completed years × the lower of annual entitlement and 30, minus leave already consumed, floored at zero and capped at the days being encashed.

For example, five years at 40 days per year with 126 days consumed gives 24 tax-reckonable days, even if 74 days remain in the actual balance. If entitlement changed, service records include partial-year adjustments, or there are multiple simultaneous settlements, obtain an individual payroll computation.

Would this calculate my income tax or net settlement?

No. It estimates the leave payout and its exempt / taxable split. Income tax and TDS depend on your total income, tax regime and other facts. Government exemption here applies to Central / State government employees; it does not automatically extend to PSUs. Death benefits and other special cases need a separate assessment.