1. What is Leave Salary?

Leave salary refers to the payment an employee receives for unused leave days upon retirement, resignation, or death. In the Indian government context, it's calculated based on basic pay and dearness allowance (DA).

2. How Does the Calculator Work?

The calculator uses the standard leave salary formula:

Where:

• Basic Pay — Employee's monthly basic salary in INR
• DA — Dearness Allowance (typically a percentage of basic pay)
• Leave Days — Number of unused leave days being encashed

Explanation: The formula calculates the pro-rata salary for the leave days based on a 30-day month.

3. Importance of Leave Salary Calculation

Details: Accurate leave salary calculation ensures employees receive proper compensation for their unused leave days, which can be a significant amount especially for long-serving government employees.

4. Using the Calculator

Tips: Enter basic pay in INR/month, DA amount in INR (calculate this separately if needed), and the number of leave days to be encashed. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is DA always included in leave salary calculation?
A: Yes, in the Indian government context, DA is always included as it's considered part of the salary.

Q2: What is the maximum leave that can be encashed?
A: Rules vary, but typically up to 300 days of earned leave can be encashed upon retirement.

Q3: Is leave salary taxable?
A: Leave salary received during service is taxable, but received at retirement may be exempt under Section 10(10AA) of Income Tax Act.

Q4: How is DA calculated?
A: DA is typically a percentage of basic pay (e.g., 55%). You need to calculate this separately before using this calculator.

Q5: Does this apply to private sector employees?
A: This calculator follows government rules. Private sector rules may differ based on company policy.