Many employees asked about the cost value of one leave. The employees of vocational department or the employees who avail summer/winter/spring vacations earn a minimum of 9 to 12 leaves in a calendar year. Those employees who don’t have any kind of such vacation get 48 days leave in a year in addition to casual Leaves. If the employees have vacation during any one but the employees perform duty 16 days or more then he/she will get 1 leave in his/her leave credit.
Cost Value of one Leave
Before we go to the cost value of leaves, we further study the leaves earned for the employees having a vacation and for those who don’t have a vacation.
Leaves Earning for the Employees Not Having Vacation
The employees, who don’t have vacation throughout the year at all, earn 48 days of leave in a calendar year. If the employee has 25 years of service then the total leaves earned during 25 years are as under:
25 x 48 = 1200 leaves
The maximum useful leaves for the purpose of leave encashment are 365. If the employee has more than 365 days leave in his/her credit, then these extra leaves or of no use for the purpose of leave encashment.
Leaves Earning for the Employees Having Vacation
The employee avails vacation every year i.e Summar Vacation, winter vacation, or Spring vacation then the employee gets 9 to 12 leaves in a calendar year. I have already explained in detail whether the employee will get 9 or 10 earned leaves during a calendar year. That rule was generally for teachers.
Suppose an employee gets 10 leaves in a calendar year and has 25 years of service then the total leaves earned during his/her 25 years of service is as under:
10 x 25 = 250
The employee in this example has only 250 days leave in his/her service of 25 years. If his service is 35 years then he/she will get 350 days of leaves. In the above calculation, the employee still did not have the full 365 days leave credit target. So he/she will get leave encashment only for the leaves in his/her credit. In the above example, the employee will get leave encashment only for 250 days or other 350 days.
Calculation of Leave Encashment
If the employee has 365 days leave or more then the calculation is simple, we just multiply 12 by the Last Basic Pay drawn by the employee. This basic pay includes personal pay (PP) and Special Pay (if any). I have also already explained in detail the calculation of leave encashment formula for the employees.
Encashment Amount = Last Basic Pay 12
If the employee has less than 365 days of leaves then we shall calculate the same as under:
Leave Encashment Amount = Last Basic Pay x No of leaves in Credit x 12/365
Value of One Leave
Keeping in view the above facts, we can easily conclude the values of one leave in the credit of an employee.
| Leave Encashment Calculation | |
| Description | Values |
| Last Basic Pay Drawn | 150000 |
| Total Leaves in Credit | 350 |
| Total Leave Encashment | 1726027 |
| Value for One Leave | 4931.507 |
In the above example, if the employee has 350 days leave with 150,000/- basic pay then the value of one leave comes to Rs. 4932/- This means each leave has a great value for the employee.