leave encashment application letter

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Leave Encashment Request letter – Sample Letter to HR for Leave Encashment

To, The Human Resource Manager, __________ (Name of the Company) __________ (Address)

Date: __/__/____ (Date)

From, __________ (Name) __________ (Department) __________ (Address)

Subject: Request for leave encashment

Respected Sir/Madam,

With due respect, my name is __________ (Your name). I work in __________ (mention your department), holding position __________ (Designation) in your company. My employee number is __________ (Mention employee ID number). I have been working in this company from past ______ (Number of years).

I am writing this letter in order to request you for leave encashment for the duration of __________ (Mention duration – financial year/, any other duration) from __/__/____ (Date) till __/__/____ (Date).

I request you to kindly process the same at the earliest, as I am needing this for __________ (Mention reason- an urgent requirement for travel/ sickness/ debt/ payments/ any other reason).

Hoping you will understand the necessity and proceed with the request.

Yours Sincerely/Faithfully,

__________ (Your Name) __________ (Designation) __________ (Department)

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• Application For Annual Leave Encashment

Applying for annual leave encashment is a process that allows employees to convert their accrued unused leave days into monetary compensation. To help you draft a well-structured and professional application for annual leave encashment, we have prepared four templates for various scenarios. These templates cover formal, concise, personalized, and urgent requests, allowing you to choose the one that best suits your specific situation.Each template emphasizes the importance of adhering to company policies and guidelines regarding leave encashment. They include essential details such as the number of leave days to be encashed, the date of accumulation, and any additional documentation required by the organization. Furthermore, the templates maintain a respectful and professional tone throughout, ensuring that your application is received with the appropriate level of seriousness.It is crucial to personalize these templates by incorporating your specific details, such as your name, employee ID, contact information, and any additional information or circumstances relevant to your request. Adapting these templates to your individual needs will help you communicate your request effectively and increase the chances of a successful outcome.We recommend carefully reviewing your organization's leave policy and procedures before submitting your application. This will ensure that you comply with any eligibility criteria or limitations that may exist. Additionally, if there are any specific instructions or forms provided by your company for the encashment process, be sure to include them in your application as required.By utilizing these templates, you can create a well-crafted application for annual leave encashment that highlights your understanding of the company's policies and expresses your request in a professional manner. Remember to submit your application within the designated timeframe and maintain open communication with the appropriate department to facilitate a smooth processing of your request.Please note that these templates are meant to serve as a guide and should be adapted to align with your unique circumstances and company requirements.

Template Request for leave encashment

Subject: Request for leave encashment

Dear [Manager's name],

I am writing to request for leave encashment of my unused annual leave. According to my records, I have [number] days of annual leave remaining for this year.

As per the company policy, I am entitled to encash up to [number] days of annual leave per year. I would like to avail this benefit and receive the payment for my unused leave.

I have attached the form 10E and other relevant documents for your approval. Please let me know if you need any further information or clarification.

I appreciate your prompt response and cooperation.

[Your name and signature]

Template Application for annual leave encashment

Subject: Application for annual leave encashment

Respected Sir/Madam,

I am [your name], working as [your designation] in [your department]. I am writing this application to request for annual leave encashment.

I have not taken any annual leave in this financial year and I have [number] days of leave balance. I request you to kindly approve my application and grant me the leave encashment as per the company policy.

I have filled the form 10E and submitted it online on the income tax portal. I have also attached a copy of the acknowledgement receipt and other necessary documents with this application.

I hope you will consider my request and process it at the earliest.

Thanking you in advance.

Yours faithfully,

Template Letter for annual leave encashment

Subject: Letter for annual leave encashment

To whom it may concern,

I am [your name], working as [your designation] in [your department]. I am writing this letter to apply for annual leave encashment.

Due to some personal reasons, I could not avail any of my annual leave in this year. I have [number] days of leave balance as of today. I request you to kindly allow me to encash my unused leave as per the company policy.

I have completed the form 10E and submitted it online on the income tax portal. I have also enclosed a copy of the acknowledgement receipt and other relevant documents with this letter.

Please approve my application and process the payment at your earliest convenience.

I appreciate your kind attention and cooperation.

Yours sincerely,

Template Claim for annual leave encashment

Subject: Claim for annual leave encashment

I am [your name], working as [your designation] in [your department]. I am writing this claim to request for annual leave encashment.

As you know, I have not taken any annual leave in this year due to the heavy workload and tight deadlines. I have [number] days of leave balance as of now. I would like to claim the payment for my unused leave as per the company policy.

I have filled out the form 10E and submitted it online on the income tax portal. I have also attached a copy of the acknowledgement receipt and other supporting documents with this claim.

Please review my claim and approve it at the earliest possible time.

Thank you for your consideration and support.

We are delighted to extend our professional proofreading and writing services to cater to all your business and professional requirements, absolutely free of charge at Englishtemplates.com . Should you need any email, letter, or application templates, please do not hesitate to reach out to us at englishtemplates.com. Kindly leave a comment stating your request, and we will ensure to provide the necessary template at the earliest.

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27+ Leave Encashment Letter – Meaning, Format, Examples

• Letter Templates
• March 4, 2024
• Leave Letters , Employee Letters , Office Letters

Leave Encashment Letter: Leave encashment is a process by which an employee is paid for any accumulated or unused leave days that they are entitled to . This can be a valuable benefit for employees who are looking to receive some extra income or compensation for their hard work. When requesting leave encashment, it is important to write a leave encashment letter to your employer.

Also Read- Leave Letter After Taking Leave 

Leave Encashment Letter – Meaning

Content in this article

A leave encashment letter is a written request from an employee to their employer asking for payment for any unused leave days that they have accumulated during their employment . It’s like getting paid for the vacation days that you didn’t take. This letter is used to formally ask for the payment and to provide any necessary details, such as the number of unused leave days and the reason for the request.

Not all employers offer leave encashment, so it’s important to check the company policies before making the request.

Leave Encashment Letter – Necessary Points

When writing a leave encashment letter, there are several necessary points that should be included to ensure that your request is properly addressed and considered. These include:

• State your intention to request leave encashment and the number of unused leave days that you have accumulated.
• Mention the reason why you are requesting this payment, such as to cover unexpected expenses or to save for a future purchase.
• Provide any relevant policies or regulations that your employer should be aware of, such as deadlines or conditions for requesting leave encashment or tax implications that may be applicable.
• Mention the period for which you are requesting leave encashment.
• Provide any supporting documents that may be required, such as your leave balance statement or any relevant tax documents.
• Thank your employer for their understanding and cooperation during this time.

Leave Encashment Letter – Sample Format

If you need to write a Leave Encashment Letter, here’s a sample format:

[Your Name] [Your Position/Department] [Company Name] [Company Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date]

[Human Resources Department/Supervisor’s Name] [Company Name] [Company Address] [City, State, ZIP Code]

Subject: Request for Leave Encashment

Dear [Human Resources Department/Supervisor’s Name],

I trust this letter finds you well. I am writing to formally request the encashment of my accrued and unused leave days. I have carefully reviewed my leave balance, and I would like to proceed with the encashment as per the company’s policy.

Details of my leave balance are as follows:

• Total Leave Entitlement: [Total Leave Entitlement]
• Leave Taken: [Leave Taken]
• Remaining Leave Balance: [Remaining Leave Balance]

I would like to request the encashment of [Number of Days] leave days. As per company policy, I understand that the encashment amount will be calculated based on my daily salary rate.

I am aware of any applicable deductions or taxes associated with leave encashment and am willing to comply with the necessary procedures.

Please find attached the leave balance statement for your reference. Kindly guide me through any additional forms or procedures required to process this request.

I appreciate your prompt attention to this matter and look forward to a positive response.

[Your Full Name] [Your Employee ID] [Your Signature – if sending a printed letter]

Feel free to customize this template based on your specific situation, company policies, and the nature of your relationship with your supervisor or the Human Resources Department. Ensure the letter is clear, concise, and maintains a professional tone throughout.

Leave Encashment Letter – example

Here’s an example of Leave Encashment Letter:

Dear [Employer’s Name],

I am writing to request leave encashment for my accumulated unused leave days. According to my leave balance statement, I have [Number of Leave Days] unused leave days that I have not utilized since my joining date.

The reason for my request is that I am in need of some financial assistance to cover some unexpected expenses. I would be grateful if you could process my request for leave encashment at the earliest possible date.

I have attached my leave balance statement to this letter, along with any other relevant documents that may be required. Please let me know if there are any other documents or information needed to process my request.

Thank you for your kind attention to this matter. I appreciate your understanding and support.

[Your Name]

Leave Encashment Letter – Example

Annual Leave Encashment Letter

Here is an annual leave encashment letter that you can use as a guide when writing your own letter:

I am writing to request annual leave encashment for my accumulated unused annual leave days. According to my leave balance statement, I have [Number of Annual Leave Days] unused annual leave days that I have not utilized since my joining date.

The reason for my request is that I am in need of some financial assistance to cover some unexpected expenses. I would be grateful if you could process my request for annual leave encashment at the earliest possible date.

As per the company policy, annual leave encashment is allowed once a year for employees who have accumulated unused annual leave days. I am aware of the relevant deadlines and procedures for requesting annual leave encashment, and I assure you that I have met all the necessary requirements.

Annual Leave Encashment Letter 

Leave Encashment Letter to HR

If you need to write a Leave Encashment Letter to HR:

[Your Name] [Your Employee ID] [Your Department] [Company Name] [Company Address] [City, State, ZIP Code] [Email Address] [Phone Number] [Date]

[HR Manager’s Name] [Company Name] [Company Address] [City, State, ZIP Code]

Subject: Leave Encashment Request

Dear [HR Manager’s Name],

I trust this letter finds you well. I am writing to request the encashment of my accrued leave days as per the company’s leave policy.

Details of my leave:

• Leave Start Date: [Start Date]
• Leave End Date: [End Date]
• Total Leave Days: [Number of Days]

Due to [mention the reason, if applicable, e.g., personal commitments, financial needs], I would like to encash [mention the number of days] days of my accumulated leave.

I have reviewed the company’s leave policy, and I understand that leave encashment is subject to [mention any specific conditions or limitations]. I am willing to comply with any additional documentation or procedures required for the processing of this request.

For your convenience, I have attached the necessary leave records and supporting documents.

I appreciate your prompt attention to this matter and request you to kindly guide me through the further steps in the process.

Thank you for your understanding and assistance.

Feel free to customize this template based on your specific situation, the policies of your company, and any additional details required for your leave encashment request.

Leave Encashment Letter – Template

Here’s a template for a Leave Encashment Letter:

I trust this letter finds you well. I am writing to formally request the encashment of my accrued leave days in accordance with the company’s leave policy.

Due to [mention the reason, if applicable, e.g., personal commitments, financial needs], I am seeking the encashment of [mention the number of days] days of my accumulated leave.

Having reviewed the company’s leave policy, I am aware that leave encashment is subject to [mention any specific conditions or limitations]. I am prepared to provide any necessary documentation or comply with additional procedures required for the processing of this request.

For your convenience, I have attached the relevant leave records and supporting documents.

I appreciate your prompt attention to this matter and kindly request guidance on the subsequent steps in the process.

Feel free to adapt this template based on your specific situation and the policies of your company. Ensure that all relevant details are included in your letter.

Leave Encashment Request Letter

If you need to write a Leave Encashment Request Letter, here’s a sample format:

[Your Employee ID]

[Your Department]

[Company Name]

[Company Address]

[City, State, ZIP Code]

[Email Address]

[Phone Number]

[HR Manager’s Name]

[Your Full Name]

[Your Signature – if sending a printed letter]

Feel free to customize this template based on your specific situation and the policies of your company. Ensure that all relevant details are included in your letter.

Leave Encashment Letter to Manager

If you need to write a Leave Encashment Letter to your manager:

[Manager’s Name] [Your Department] [Company Name] [Company Address] [City, State, ZIP Code]

Dear [Manager’s Name],

I hope this message finds you well. I am writing to inform you about my decision to encase a portion of my accrued leave as per the company’s policy.

The reason for this request is [mention the reason, e.g., personal commitments, financial needs]. I have reviewed the company’s leave policy, and I am aware of the conditions and limitations regarding leave encashment.

I am seeking to encase [mention the number of days] days of my accumulated leave. I am willing to provide any necessary documentation or adhere to any additional procedures required for the processing of this request.

I appreciate your understanding and support in this matter. Your guidance on the next steps in the process would be highly valuable.

Thank you for your time and consideration.

Feel free to customize this template based on your specific situation and the policies of your company. Ensure that the tone remains professional and that you include accurate details related to your leave encashment request.

Leave Encashment Application

If you need to write a Leave Encashment Application, here’s a sample format:

Subject: Leave Encashment Application

I hope this letter finds you well. I am writing to formally apply for the encashment of my accrued leave days, as per the company’s leave policy.

The reason for this application is [mention the reason, e.g., personal commitments, financial needs]. I have carefully reviewed the company’s leave policy and am aware of the conditions and limitations regarding leave encashment.

I am seeking to encash [mention the number of days] days of my accumulated leave. I am prepared to provide any necessary documentation and adhere to additional procedures required for the processing of this request.

I appreciate your prompt attention to this matter and kindly request guidance on the subsequent steps in the application process.

Thank you for your understanding and cooperation.

Feel free to customize this template based on your specific situation and the policies of your company. Ensure that the tone remains professional and include accurate details related to your leave encashment application.

Leave Encashment Letter – Email Format

Here’s an Email format of Leave Encashment Letter:

I hope this email finds you well. I am writing to request leave encashment for my unused leave days.

According to my leave balance statement, I have [Number of Leave Days] unused leave days that I have not utilized since my joining date. I would like to request payment for these unused leave days, as I am in need of some financial assistance to cover some unexpected expenses.

As per the company policy, I am entitled to leave encashment for my unused leave days. I have attached a copy of my leave balance statement to this email, along with any other relevant documents that may be required.

I understand that there may be certain guidelines and procedures that need to be followed in order to process my request. I would appreciate it if you could provide me with the necessary information and guidance to ensure that my request is properly addressed and processed.

Thank you for your attention to this matter. I appreciate your understanding and support.

Leave Encashment Approval Letter

If you need to write a Leave Encashment Approval Letter:

[Company Logo] [Company Name] [Company Address] [City, State, ZIP Code] [Date]

[Employee’s Name] [Employee ID] [Employee Department] [Employee Address] [City, State, ZIP Code]

Subject: Leave Encashment Approval

Dear [Employee’s Name],

I hope this letter finds you well. After careful consideration of your leave encashment application, I am pleased to inform you that your request has been approved.

Details of the approved leave encashment:

• Total Leave Days Encased: [Number of Days]

We understand that the decision to encash leave is a personal one, and we appreciate your adherence to the company’s leave policy. The approved amount will be processed along with your next payroll.

Please be aware that the applicable taxes and deductions, if any, will be applied as per the company’s policies.

If you have any further questions or if there is anything else you need, please do not hesitate to contact the HR department.

Thank you for your cooperation and understanding.

[HR Manager’s Name] [HR Manager’s Signature – if sending a printed letter] [Company Name] [HR Manager’s Contact Information]

Feel free to customize this template based on your specific situation and the policies of your company. Ensure that the tone remains professional and include accurate details related to the approved leave encashment.

Leave Encashment letter during Resignation

If you need to write a Leave Encashment Letter during resignation, here’s a sample format:

Subject: Request for Leave Encashment during Resignation

I hope this letter finds you well. I am writing to formally request the encashment of my accrued leave days as I tender my resignation from [Company Name]. I have thoroughly enjoyed my time working here, and this decision has not been made lightly.

I appreciate your prompt attention to this matter and kindly request guidance on the subsequent steps in the process during my resignation.

Feel free to customize this template based on your specific situation and the policies of your company. Ensure that the tone remains professional and include accurate details related to your leave encashment request during resignation.

Leave Encashment Letter During Resignation

FAQS About Leave Encashment Letter – Meaning, Format, Examples

What is a leave encashment letter.

A Leave Encashment Letter is a formal request or notification written by an employee to their employer or HR department, seeking to convert accrued unused leave days into monetary compensation as per the company’s policy.

What should be included in a Leave Encashment Letter?

A Leave Encashment Letter should include the employee’s details, details of the leave to be encashed (start and end date), the reason for encashment, an acknowledgment of company policies regarding leave encashment, and any supporting documentation.

How to format a Leave Encashment Letter?

The letter should typically follow a formal business letter format. It should include a salutation, introduction stating the purpose, details of the leave to be encashed, the reason for encashment, an acknowledgment of company policies, and a closing with the employee’s signature.

Can you provide a sample Leave Encashment Letter?

Certainly, a sample letter includes employee details, leave details, reason for encashment, and acknowledgment of policies. It should be written in a clear and professional tone. Feel free to use the sample formats provided in this conversation.

What is the significance of a Leave Encashment Letter during resignation?

When resigning, an employee may request leave encashment as part of the final settlement. The letter formalizes the request, providing details of the leave to be encashed and demonstrating the employee’s awareness of company policies.

A leave encashment letter is a formal request made by an employee to their employer, asking for payment in lieu of their unused leave days. The letter should clearly state the number of unused leave days the employee has, the reason for the request, and any relevant company policies or procedures. It is important to follow the appropriate guidelines and procedures when making a request for leave encashment, and to provide all necessary documentation to support the request. A well-written leave encashment letter can help facilitate a smoother process and ensure that the employee’s request is properly addressed and processed.

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Application for leave encashment sample.

Sample  Application for leave encashment/earned against annual leave. Employees can use this format of application to get leave encashment. Sample application for leave encashment from employer or company. Leave encashment mean the payment of your annuals leaves which you do not avail for any reason. Sample letters are  given below.

The Manager Admin/HR…./ General Manager etc,

(put here your Organization name),

…………………. (Put here your City Name).

Respected Sir/Madam, I am working with your esteem organization with keen interest and hard working. The proof for this hardworking can be seen on my attendance sheet that I never missed a single day last year and remain present full and whole working days when I need to have a holiday. When and where the organizations need me I was there to help and assist other members of this organization. In spite of all doing and hardworking it was amazing that I alone could not get my leave encashment for the year ……(Put here the year).

Kindly grant me Leave Encashment for those days which I served extra.

Thanking you I remain,

Yours Sincerely,

………………………(Your Name)

………………………( Your Designation)

………………………(put your signature here)

……………………… (Dated)

Best Leave Encashment Examples

Leave encashment is a process through which employees can convert their unused paid time off (e.g., vacation days, sick leave) into cash. Here are three different formats for leave encashment examples:

• Standard Leave Encashment Request Letter:

[Your Name] [Your Address] [Email Address]

[Employer’s Name] [Company Name] [Company Address] Dear [Employer’s Name],

I am writing to request leave encashment for the unused paid time off that I have accrued during my employment with [Company Name]. I have carefully reviewed the company’s policy on leave encashment, and I believe I am eligible to make this request. Here are the details of my leave encashment request: Employee Name: [Your Name] Employee ID: [Your Employee ID] Total Accumulated Leave Balance: [Total Number of Unused Leave Days] Leave Balance as of [Last Leave Balance Update Date]: [Leave Balance as of Date] Requested Leave Encashment Amount: [Amount in Dollars] I kindly request that you process this leave encashment request as per the company’s policy and guidelines. Please find attached the necessary documents, including a copy of my latest leave balance statement and any other documents required for this request. If there is any additional information needed from my end or if you require any further documentation, please do not hesitate to contact me at [Your Email Address] or [Your Phone Number]. Thank you for considering my request, and I look forward to a prompt response.

Sincerely, [Your Name]

• Email Format for Leave Encashment Request

Subject: Leave Encashment Request

Dear [Supervisor’s Name],

I hope this email finds you well. I am writing to request leave encashment for my accumulated unused leave days. As per the company’s leave policy, I am eligible for leave encashment, and I would like to proceed with the process. Employee Name: [Your Name] Employee ID: [Your Employee ID] Total Accumulated Leave Balance: [Total Number of Unused Leave Days] Leave Balance as of [Last Leave Balance Update Date]: [Leave Balance as of Date] Requested Leave Encashment Amount: [Amount in Dollars] I have attached the necessary documents, including my latest leave balance statement, for your reference. If there are any additional forms or documents required, please let me know, and I will provide them promptly. I kindly request your assistance in processing this leave encashment request and appreciate your prompt attention to this matter. If you have any questions or need further information, please do not hesitate to reach out to me at [Your Email Address] or [Your Phone Number]. Thank you for your support.

• Leave Encashment Application Form

[Company Name] Leave Encashment Request Form Employee Details: Employee Name: __________________________________________________________ Employee ID: ____________________________________________________________ Department: ____________________________________________________________ Leave Details: Total Accumulated Leave Balance: __________________________ Leave Balance as of [Last Leave Balance Update Date]: _______________ Requested Leave Encashment Amount (in Days): ______________________ Bank Details (for Direct Deposit): Bank Name: ______________________________________________________________ Account Holder Name: ______________________________________________________ Account Number: __________________________________________________________ Routing Number (if applicable): ____________________________________________ I hereby request leave encashment for the above-mentioned leave balance. I understand and agree to abide by the company’s leave encashment policy and guidelines. I have attached the necessary documents, including my latest leave balance statement, for your reference. Signature: ___________________________________ Date: _______________ [Submit this form to the HR department or your supervisor as per your company’s process.]

Please note that these examples are templates, and you should customize them to fit your specific company’s policies and procedures for leave encashment. Additionally, make sure to double-check all the details and ensure compliance with applicable laws and regulations.

Leave Encashment Application Format

To, The Manager, Sewagh Steel Mills, India.

Subject: Application for due Encashment of previous Annual Leaves.

With Due Respect, humbly stating that I am working in Sewage Steel Mills from more than two years as a Contractor Agent appointed by the Chairperson. I had completed my probation period and my due security money is also deducted from my monthly salaries but like other employees who are still serving in this institution are fully paid by due encashment of annual leaves in the month of

January every year but I was not given the due encashment of my leaves from the past two (2) years. Kindly on the basis of Company’s policy I must be entertained with my annual leaves encashment. Thank you.

Yours Truly, Hatail Perteeb September 15, 2023

Annual Leave Encashment Request Application

To, The Area Supervisor, Elmetec Pvt (ltd). Lahore.

Subject: Application for Payment of Leave Encashment

Respected Sir,

I am Khalid Ahmed, working your prestige organization, I am senior employee of company which are serving since last ten years. It is to inform you that at the end of every closing  year as per the policy of company, leave encashment is provided to the employees. I want to get my leave encashment of this year in the next week due to my daughter’s marriage  ceremony.

As, I have taken leave of few days and organize the whole event and I urgently need money. Kindly, grant my leave encashment of this year as soon as possible. It would be a great favor for me and my family. I will be very grateful to you.

Thanking you.

Yours Sincerely, Khalid Ahmed

Application for Annual Leave Encashment

The Finance Director, Intertech Pvt( ltd) Gulberg, Lahore

Subject: Application for Leave Encashment

It is stated that I have completed two successful years of my service in this organization from 20th June 2022-till 20th June 2023. It is requested that, Kindly issue necessary instructions to the accounts department for issuing  my leave encashment as per company policy. I shall be very thankful to you for your good self.

Sincerely Yours,

Ahmed Aftab Sales Officer

Application for Leaves Adjustment on Account of Leave Encashment

The Vice President, Rising Sun Institution of Special Children, DHA

Subject: Application for Leaves Adjustment

Please be informed that two members of Resource Development Team i.e. (Mr. Saqib and Mr. Babar) have worked and provided their extra services on Sundays and on the days which were announced officially off, during the tenure of Ramadan Campaign.

I want you to adjust their leaves because they were involved in official work. Being their utmost right, this is to request that kindly accommodate their extra working days on account of Leave Encashment. The schedule of their working days is attached with the application.

Thanking you in anticipation. Sincerely, Saima Jillani Manager Marketing

Sample Format Application for Due Leave Encashment. This type of format application is being used by offices, multinational companies, Call Centers and Beverages Companies.

11 thoughts on “Application for Leave Encashment Sample”

please send me earned leave application

You may find it in the given link! https://documentshub.com//leave-application-2/paid-sick-leave-application-to-office/

How to apply for 15 days pl encashment arrears letter format

The Concerned Person, With due reverence it is stated that I am writing in order to apply for the 15 days encashment arrears. I humbly request you to considerate upon my application and grant me approval. Sir, I assure you that right after the mentioned time I will submit the arrears into accounts office or where ever I’ll be ordered. I shall be intensely grateful and obliged. Thanking you I remain. Sincerely, Name Designation

Sample leave application for encashment

Thanks a lot solve my problem

How to apply for 15 days pl encashment arrears letter format? Reason mother sick

Use the format given above with the statement that ‘I am applying for this on account of my mother’s illness and I have no other source for her treatment’.

i want to encasement for my annual leave and airfare

The Concerned Person, ABC Organization.

Respected Sir, Please be informed with due reverence that, I want to avail the facility of annual leave and on account of this I am planning to visit my country. I want to request for the coverage of expenses including airfare by company as per policy. Kindly, help me in this regard. I shall remain obliged.

Sincerely, Name: —————- Designation:——————–

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Application for Annual Leave Encashment

Sample application for leave encashment from employer, or company. Leave encashment mean the payment of your annual leaves which you do not avail for any reason. Sample request letter for annual leave encashment from company, office, HR Manager, or HR Department if you qualify for leave encashment as per company policy after the financial year.

Application for Annual Leave Encashment Template

The Chief Financial Officer IR Systems Lahore.

Most respectfully, it is stated that I have completed another successful year of my service in IR Systems as on 20 th February, XXXX. Therefore, please accord the approval for my leave encashment as per company policy. I shall very thankful to you for this act of kindness.

Thanking you in anticipation,

Syeda Mehreen Accounts Officer

Annual Leave Encashment Request Letter

The Branch Manager, Standard Chartered Bank. Gulberg 2, Lahore.

Subject: Application for Payment of Leave Encashment

Dear Sir, It is stated that I am Kareem Fahad, working in Standard Chartered Bank, since last three years. It is to inform you that at the end of every year as per the policy of bank, leave encashment is provided to the employees.

I want to get my leave encashment of this year in the next week. As, I have taken leave of few days, and moving on to another city, and i need some money for this purpose. Kindly, grant my leave encashment of this year as soon as possible. It would be a great favor for me. Thanking you I remain.

Yours sincerely,

Kareem Fahad

Application Format for Leave Encashment

Finance Manager, Esna Foundation. Gulberg 2, Lahore.

Subject: Request for Leave Encashment

Sir, With due respect it is stated that according to the policy of our company, leave encashment to every employee is provided. I want to inform that being a sincere staff member, another year of my employment is over, and my leave encashment of the year XXXX is still pending. I request you to kindly provide me with the leave encashment facility. It would be a great source of pleasure for me. I shall be highly obliged. Thanking you.

Sincerely, Hamza Aslam

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Leave Encashment Letter

Subject: Request for Leave Encashment

Dear [Recipient's Name],

I hope this letter finds you in good health and high spirits. I am writing to formally request the encashment of my accumulated leave days as per the policy outlined in the employee handbook of [Company Name]. As per my records, I have [number of leave days] days of unused leave entitlement that I would like to convert into monetary compensation.

I am making this request due to personal circumstances that prevent me from taking a prolonged break from work at this time. However, I am aware that the company's policy allows for leave encashment, subject to certain terms and conditions. I kindly request you to review my request and provide me with the necessary information and procedures to initiate the process.

Please find the details of my leave entitlement and other relevant information below:

Employee Name: [Your Name]

Employee ID: [Your Employee ID]

Total Leave Entitlement: [Total number of leave days earned]

Unused Leave Days: [Number of unused leave days]

Effective Date: [Date from which the leave encashment should be calculated]

I would appreciate it if you could guide me through the required paperwork and documentation that need to be completed for the leave encashment process. Additionally, if there are any specific deadlines or procedures that I need to follow, please inform me accordingly.

Furthermore, I would like to confirm that I understand and accept any deductions or tax implications associated with the leave encashment, as per the prevailing company policies and local regulations. I request you to provide me with the necessary information regarding tax deductions or any other deductions that may be applicable in this case.

I assure you that I will continue to perform my duties and responsibilities diligently during this period and make every effort to ensure a smooth transition for any work that may need to be reassigned in my absence.

Thank you for your attention to this matter. I look forward to receiving your prompt response and guidance regarding the leave encashment process. Should you require any additional information or documentation, please do not hesitate to contact me.

Yours sincerely,

[Your Name]

Sample Application format for Annual Leave Encashment

[These Sample application formats are applicable for leave encashment from employer or company. Leave encashment mean the payment of your annual leaves which you do not avail for any reason. You can follow these sample request letter for annual leave encashment from company, office, HR Manager or HR Department if you qualify for leave encashment as per company policy after the financial year.]

Authority name/Position name…

Institute Name…

Institute Address…

Sub: Application for Payment of Leave Encashment

Respected Sir,

It is stated that I am (Name), working in (Institute name), since last three years. It is to inform you that at the end of every year as per the policy of the institute, leave encashment is provided to the employees.

I want to get my leave encashment of this year in the next week. As, I have taken leave of few days and moving on to another city, and I need some money for this purpose (Show your cause). Kindly, grant my leave encashment of this year as soon as possible. It would be a great favor for me.

Thanking you I remain.

Yours sincerely,

Job Designation…

Contact no…

Another Format,

Subject: Request for Leave Encashment

With due respect, it is stated that according to the policy of our company, leave encashment to every employee is provided. I want to inform that being a sincere staff member, another year of my employment is over and my leave encashment of the year XXXX is still pending.

I request you to kindly provide me with the leave encashment facility. It would be a great source of pleasure for me. I shall be highly obliged.

Thanking you.

Thank You Letter Format from Bank

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Leave Encashment Letter

A leave encashment letter is a formal letter usually addressed to the Human Resource department in the last month of the year. Every employee in an organization starts out with a leave balance at the beginning of each year, and if by the end of the year, you happen to have unused leaves in this balance, you can get them en-cashed (i.e. receive payment for each unused leave, as per your daily wage) according to your company’s policy.

Tips for Writing a Leave Encashment Letter

• Keep the letter short and address it to your HR manager.
• Mention the number of remaining leaves you have.
• Ask the HR department to confirm your request.
• Find out whether you need to follow a certain procedure.

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Instructions

Sample of a Leave Encashment Letter #1 Victoria Beckham 970 Prospect Ave, Apt 101 Hollister, CA 95023-4990 714-333-9408 20th December, 2011  

Larry King HR Manager ABC Telecom Company 31531 Peppertree-Bend San Juan Capistrano, CA 92675 949- 260-9990 Subject: Leave Encashment Letter  

Respected Sir, I am writing this letter to avail the leave encashment option offered by the human resources department. The year is fast approaching its end, and since I won't be taking any time off, I feel it is best that I ask for leave encashment.  

As per my own record, I have 17 leaves in my annual balance, kindly correct me if I am mistaken.  

Looking forward to your confirmation, Regards, Victoria Beckham Project Supervisor

Leave Encashment Letter Sample #2 Sylvester Mark 970 Prospect Ave, Apt 101 Hollister, CA 95023-4990 714-333-9408

31st December, 2015 HR Manager XYZ technology 31531 Peppertree-Bend San Juan Capistrano, CA 92675 949- 260-9990

Subject: Leave Encashment Letter Dear Sir, In response to the e-mail sent out by the HR department earlier, I would like to register my willingness to avail the leave encashment option. I have 15 leaves in my annual leave balance, and would like to cash all of them.

Please let me know the procedure I need to follow. Thanks and regards, Sylvester Mark Assistant Manager

Template of a Leave Encashment Letter (Your Name) (Your Address) (Your City, State, Zip Cod) (Your Phone Number)

(Date) (Name of your head) (Designation of your head) (Name of your Organization) (Address of your Organization) (City, State, Zip Code)

Subject: (this is should be bold and underlined). Dear (Mr. /Mrs. /Ms. Last name), I am writing this letter to formally request leave encashment for the leaves remaining in my annual balance. As per my own record, I have (Number of leaves remaining), and I would like to cash all of them.

Kindly confirm my request and let me know if I need to follow a certain procedure, Regards, (Your signature) (Your name)

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People Who Read This Also Read:

Letter to Employees to Encash Paid Leave

Remind employees to encash or carry forward their unutilised paid leave.

Annual paid leave is a benefit to an employee and companies tend to encourage its employees to avail them for their rest and recreation. Many employees may not be able to avail all of their leaves due to various factors. This would result in accumulation of unavailed leaves at the end of the year and would lapse, if not utilised on time.

This letter template is available for download in Word format.

With this Letter to Employees to Encash Paid Leave template you can:

• Send mild reminder to help employees plan for their leaves
• Enable the HR to rollout communication each year
• Address all sections of employees

In just a few minutes you will be able to create a letter to employees to encash paid leave. This template covers vital information like:

• Understanding of leave encashment or carry forward process
• Provision to aid decision making about whether to apply for leave or to encash/carry forward
• Provision to plan for activities to be performed prior to proceeding on leave

More Templates

Employee Code of Conduct Policy

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Earned Leave Application Formats in English for Employees

Whenever you want to take a long leave, then it is better to use your earned leaves (ELs). Hence ELs should be applied for a longer duration, you must apply at least 7-14 days before, from the date of taking the leave. 

Here you can find some sample earned leave application formats that you can use to submit your boss.

Earned Leave Application format 1 (For 5 Days Leave)

The Manager,

Company Name,

Company Address.

Sub: Earned leave request form _____ (from date) to ________ (to date) .

Dear Sir/Madam,

My name is _______ (your name) , employee id _________, working as a _____________ (your designation) in ____________ (department) .

I am writing this letter to apply for 5 days of leave from _________ (from date) to ________ (to date) due to my wife’s health problem.

So I kindly grant me a  leave for 5 days and consider these leaves as earned leaves. 

Thanking you.

(Mobile no.)

Earned Leave Application Format 2 (On medical ground)

Sub: Application for Earned leaves.

I am ____________ (your name) , employee id _________, working as a ___________ (your designation) in  __________ (department) .

I am suffering from viral fever , after consultation with the doctor, I was advised to take 7 days rest. So I would like to take leaves from __________ (from date) to _________ (to date) . I will come back to work immediately after I recover. 

So kindly approve my leave request for above mentioned dates.

Earned Leave Application Format 3 (for Vacation)

Sub: Leave application for __ days.

Dear Mr./Ms.__________,

I am writing this letter to inform you that I will be planning to go on a vacation with my family for 10 days . Hence my project work is completed, I think it is the best time to utilize my earned leaves.

So please allow me to take leaves from _______ (from date) to ________ (to date) . I will always be available on my mobile in case of any emergency work. 

I hope you approve my leave request. 

Thanks in advance.

Earned Leave Application Format 4 (for Marriage)

Sub: Leave application for marriage.

I am writing this to inform you that my marriage is held on  ________ (marriage date) , So I would like to take a leave for 10 days from _______ (from date) to ________ (to date) , and kindly consider these leaves as earned leaves.

In case of any emergency work, I will be available on my phone and my colleague Mr./Ms. __________ (colleague name) will replace my absence.

So please approve my leave request and I shall be obliged to you in this regard.

Earned Leave Application Format 5 (for Exams)

Sub: Leave request due to exams.

I am _________ (your name) , working as a ___________ (your designation) in __________ (your department) in ___________ (company name) .

I have my MBA exams starting next week, so I need to take a leave for 10 days from______ (from date) to _______ (to date) .

So I am requesting you to kindly allow me to take leaves for the above mentioned dates and consider these leaves as earned leaves.

I hope you approve my leave request.

How to Write an Earned Leave Application

• Address the letter to the connected authority who can approve your leave request. It may be your head of the department (or) manager (or) boss.
• Mention the dates from which date to which date you want the leave.
• Write the reason for taking the leave.
• Make you request to mark the leaves as earned leaves (privilege leaves).
• After approval of your leave request, submit the leave letter to the HR department. (If you are writing an email then mention the HR email address in email CC).

Rules to Apply for Earned Leaves

• Earned leaves are for a longer duration, so use them whenever you need leave for a longer period at least for 3 or more than 3 days, otherwise use casual leaves or sick leaves.
• Hence you are going to take a long leave, apply before 7-14 days from the date of taking the leave.
• Your reason to apply for earned leave should be genuine and reasonable.
• If Sundays or public holidays fall in between your earned leaves, then contact your HR department to know your company policy whether they mark those holidays as EL or not.

1. Can I take earned leaves for personal reasons?

It is better to mention the exact reason while applying for the earned leave, for personal reasons it is better to apply for casual leaves.

2.Is earned leaves and privilege leaves the same?

Yes, they both are the same.

3. How many earned leaves will I get per year?

It depends on your state’s shops and establishment act where your company is doing their business.

• Privilege leave (earned leaves) rules and encashment details.
• Half day leave application formats or office.

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EL to take care baby

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Emails In English

Email Sample, Free to Use Email Templates

Email to Manager for Annual Leave Encashment – Sample Email Requesting Annual Leave Encashment

To:        _________@____.__ (Receiver’s email address) Bcc/Cc: _________@____.__ (Bcc/ Cc receiver’s email address)

From:   _________@____.__ (Sender’s email address)

Subject: Request for Leave Encashment

Respected Sir/ Madam, I, ___________ (name), working as __________ (designation) of your company, write this email to request you for approving the leave encashment under my name.

I am writing this email for leave encashment that has accumulated in my name. I want to inform you that I have ________ (number of leaves) days of leave which are entitled for encashment.

It is to request you to kindly approve the request and arrange for the earliest release of payment.

Thanking you,

Sincerely __________ (name), __________ (employee ID)

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What is Leave Encashment? Calculation, Taxation, and Rules

Leave encashment is a significant aspect of employment benefits, providing employees with the option to convert their unused leave days into monetary compensation. This practice is prevalent in many organizations worldwide, serving as a valuable component of employee welfare. In this comprehensive guide, we will delve into the intricacies of leave encashment, exploring the calculation methods, taxation implications, and the rules governing this employment benefit.

What is Leave Encashment?

Leave encashment refers to the process of converting accumulated, unused leave days into monetary compensation. Employees often accrue leave days as part of their employment benefits , including annual leave, sick leave, and other types of leave granted by the employer. Instead of taking these days off, employees may choose to encash them, receiving a lump sum payment equivalent to the value of the unused leave days.

Leave encashment is a flexible benefit that caters to the diverse needs of employees. Some individuals prefer taking time off for rest and relaxation, while others may find it more beneficial to receive additional income. The option to encash leave days provides employees with the autonomy to make choices that align with their personal and financial circumstances.

Calculation of Leave Encashment

The calculation of leave encashment involves determining the monetary value of the unused leave days based on various factors. The method of calculation may vary depending on the organization’s policies, employment contract terms, and applicable labor laws. Here are some common approaches to leave encashment calculation:

1. Daily Salary Basis:

One straightforward method is to calculate leave encashment based on the employee’s daily salary. The formula for this calculation is:

Leave Encashment = Daily Salary × Number of Unused Leave Days

This method is suitable for employees with a fixed daily rate of pay.

2. Average Monthly Salary Basis:

For employees with variable salaries or allowances, organizations may use the average monthly salary as the basis for leave encashment calculation. The formula is:

Leave Encashment = Average Monthly Salary ×( Number of Unused Leave Days / Number of Working Days in a Month )

​This approach considers the employee’s average earnings, providing a fair representation of their compensation.

3. Collective Bargaining Agreement:

In unionized environments, the calculation of leave encashment may be governed by collective bargaining agreements. These agreements outline specific terms and conditions, including the method for determining leave encashment benefits.

4. Statutory Requirements:

Some jurisdictions have statutory provisions that dictate the calculation of leave encashment. Employers must adhere to these regulations, ensuring compliance with the applicable labor laws.

Taxation of Leave Encashment

The taxation of leave encashment varies depending on the country’s tax laws and regulations. In many jurisdictions, leave encashment is subject to income tax, and the tax treatment may differ based on the nature of the leave and the reason for encashment. Here are key considerations regarding the taxation of leave encashment:

1. Taxation on Annual Leave:

Leave encashment for annual leave is often taxable as regular income. The lump sum payment is added to the employee’s total income for the year, and applicable income tax rates are applied. Employers typically withhold taxes at the source before disbursing the leave encashment amount.

2. Tax Exemptions:

In certain cases, there may be tax exemptions or concessions related to leave encashment. For example, some jurisdictions provide tax relief if the leave encashment is due to the employee’s retirement, resignation, or reaching a specific age. Employees should be aware of any tax concessions applicable to their circumstances.

3. Tax Deductions:

Employers may be eligible for tax deductions on the amount paid for leave encashment, depending on the jurisdiction. It is crucial for employers to understand and comply with tax laws to ensure accurate withholding and reporting.

4. Reporting and Documentation:

Both employers and employees must maintain accurate records and documentation related to leave encashment for tax purposes. This includes proper reporting on income statements and the issuance of relevant tax documents, such as Form W-2 in the United States.

Rules Governing Leave Encashment

Leave encashment is subject to specific rules and regulations to ensure fairness and consistency in its application. Organizations need to establish clear policies, and employees should be familiar with the governing rules. Here are some common rules governing leave encashment:

• Eligibility Criteria: Organizations typically define eligibility criteria for leave encashment. This may include a minimum tenure of employment or specific conditions under which leave can be encashed. New employees may have a waiting period before becoming eligible for leave encashment benefits.
• Maximum Limit on Accumulated Leave: To prevent undue burden on organizations and to encourage regular breaks for employees, there is often a maximum limit on the accumulation of leave days that can be encashed. Once employees reach this limit, they may need to use their leave days or forfeit any excess days.
• Conditions for Encashment: Employers may specify conditions under which leave can be encashed. For instance, leave encashment may be allowed only for annual leave and not for other types of leave, such as sick leave or maternity leave. Additionally, organizations may require advance notice from employees expressing their intention to encash leave.
• Payment Timing: Organizations may have specific timelines for processing leave encashment payments. This could be aligned with regular payroll cycles or follow a separate schedule. Timely and transparent communication regarding the payment process is essential to manage employee expectations.
• Impact on Other Benefits: Employees should be aware of how leave encashment may impact other benefits, such as retirement contributions, insurance coverage, and bonus calculations. Organizations may have policies addressing these considerations to ensure a comprehensive understanding of the implications of leave encashment.

Leave encashment is a valuable employment benefit that offers flexibility to employees while presenting organizations with an efficient way to manage leave balances . Understanding the calculation methods, taxation implications, and governing rules is crucial for both employers and employees to navigate this aspect of employee compensation effectively.

Employers should establish transparent policies and communicate them clearly to their workforce, while employees should familiarize themselves with their rights and responsibilities regarding leave encashment. By adhering to applicable laws and fostering a collaborative approach, organizations can ensure that leave encashment remains a positive and fair component of their overall employee benefits package.

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Leave encashment in India - a definitive guide

A study conducted by Gallup revealed that a massive 61% of people look for better work-life balance and personal well-being when searching for a new job. Leave is one of the important criteria that allows employees to achieve a strong work-life balance. Getting complete time-off from work helps employees recover from any stress and prevents burnout. Understanding this, companies around the globe have started providing ample leave to their employees. Paid leave, casual leave, sick leave, and maternity leave are the common leave types that you can offer your employees.

Some employees enjoy this time-off, while others save up their leave and risk letting it go unused. If you're an HR or payroll professional, you likely receive many questions around unused leave and need to know everything about the topic. We've put together this article to help you understand the types of leave and the concept of leave encashment, including its calculation and taxation rules.

Types of leave

All salaried individuals are entitled to a certain amount of leave according to Indian labour laws. Let's take a look at the types of leave that you can offer to your employees.

Employees earn paid leave, earned leave, or privilege leave after a specific number of working days. The condition to avail and the number of leave applicable vary from one company to another. This leave is calculated on a pro-rata basis. Employees who are eligible for paid leave receive anywhere from 12 to 20 days of earned leave per year.

This type of leave is used for personal reasons, such as festival holidays and vacations. Usually employees pre-plan and combine their paid leave to take long breaks.

There will be cases where the employee do not exhaust all their paid leave. In such a scenario, organizations can allow their employees to either carryover or encash their unused paid leave. Companies that allow encashment of unused leave can credit the equivalent amount at the beginning of the subsequent calendar year or at the time of the employee's resignation or retirement from service.

Casual leave

Casual leave is offered to accommodate any unforeseen circumstances. Companies provide their workers with seven to 12 casual leave requests per year. They allow their employees to take a minimum of half a day of leave to a maximum of three days of casual leave per month. In most organizations, anything beyond three days can be availed only using the employee's paid leave balance.

Generally, companies do not allow to carry forward or encash unused casual leave.

Employees can avail sick leave or medical leave if they fall ill and cannot work. If the worker takes more than three days of sick leave at a time, they will be required to produce a medical certificate. This type of leave is mandated by law, and companies offer up to 14 days of sick leave per year. Most organizations do not allow encashment or carrying forward of unused sick leave to the next year.

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Maternity leave.

As per the Maternity Benefit Act of 1961 , all employees pregnant with their first two children are eligible for maternity leave of up to 26 weeks. Out of the 26 weeks, up to 8 weeks can be claimed before delivery. For women who already have two children, the maternity leave for the third child is limited to 12 weeks. During this time, employees must be paid their full wages, equivalent to their last drawn pay. The act also extends leave benefits in case of a miscarriage, surrogacy, or adoption. This type of leave is not considered for encashment.

Now that we have understood the common types of leave, let's learn about how to calculate leave encashment.

What is leave encashment?

Leave encashment refers to the amount received by an employee in exchange for unused paid leave provided by the organization.

Although leave is mandatory, leave encashment is not mandated by Indian labour laws. The employer decides whether the unused paid leave can be encashed or carried forward to the next year. A study suggests that nearly 10% of paid leave goes unused per year. Encashment of such leave will be beneficial for your employees, and in turn make your organization a better place to work.

Leave encashment policy varies from company to company. Business owners and payroll professionals can determine when they can provide the encashed amount to their employees. If the employee is still working at the company, encashment of unused leave from the previous year can be credited during the first pay cycle of the following year. If the employee has retired or resigned from their position, the encashed amount can be credited along with the full and final settlement.

This brings us to the next question: As an employer, should you be deducting any tax on the encashed amount, or is it exempt from taxation? Continue reading this article to find out the answers.

Is it taxable?

An employee's encashed leave is taxable depending on when they receive it.

Leave encashment while at the company: The encashed amount is fully taxable, as it is considered a part of salary income by the Income Tax Department. This applies to both government and private employees. However, individuals can claim tax relaxation under Section 89 of the Income Tax Act.

Leave encashment upon death: When a legal heir receives the encashment on behalf of the deceased employee, the amount is fully exempt from tax.

Leave encashment at the time of retirement or resignation: Encashment received by the Central and state government employees at the time of retirement is fully exempt from tax. In the case of non-government employees, the encashed amount is partially exempt based on the computation provided under Section 10 (10AA)(ii) ; the balance amount, if any, is taxable as salary income.

Let's understand how to calculate the encashment amount before we learn about the Section 10 clause.

Leave encashment calculation

Assume that Praveen retired after 20 years of service with a private company. At the time of his retirement, his basic salary was Rs. 1,20,000. The company that Praveen worked for allowed him to take 20 days of paid leave per year. Out of the 400 total paid leave days, he used only 50 and is left with 350 days of unused leave at the time of his retirement.

Leave encashment amount is calculated based on the below formula.

Encashed amount = Basic salary per day X Number of unused earned leaves

In Praveen's case the encashed amount would be:

Encashed amount = (1,20,000 / 30) X 350 = 4,000 X 350 = Rs. 14,00,000

The leave encashment amount that Praveen would receive is Rs. 14 Lakhs.

Since Praveen is a non-government employee, his encashment amount is only partially exempt from tax based on the computations under Section 10(10AA)(ii).

Now we have to calculate the exemptions allowed on his encashed amount.

Tax exemptions on leave encashment

The encashed amount is exempt from tax up to the least of the following:

The actual amount received from the organization

Average salary (basic salary plus dearness allowance) over the last 10 months

Cash equivalent of unused earned leave

Maximum limit fixed by the government, which is Rs. 25 Lakhs

Consider that Praveen had received a sum of Rs. 14 Lakhs as an actual amount from the organization at the time of his exit. His average salary over the last 10 months is Rs. 1,20,000 X 10 = Rs. 12 Lakhs.

The cash equivalent of unused leaves is calculated by multiplying salary per day with the unutilised leave for every year of service. The maximum cap of leave is set as 30 days per year. In Praveen's case, the cash equivalent of unused leave will be:

(1,20,000/30) X ((30 X 20) - 200) = Rs. 16 Lakhs.

The tax exemption on Praveen's encashed amount will be the minimum of any one of the below values:

From the above table, the amount of encashed leave exempted under Section 10(10AA)(ii) is Rs. 12 Lakhs, the least among the four.

The taxable amount is calculated by subtracting the lower value from the lump sum given by the organization. In Praveen's case, the taxable leave encashment is:

Rs. 2 Lakhs from Praveen's encashment amount will be added to his salary income section and will be taxed according to the slab he falls under.

As an employer, you're required by law to provide a certain amount of leave to your employees. In addition to maintaining compliance, offering ample leave reflects positively on your company's work culture and increases your employee recruitment rate.

Employees after completing a specific period of service will be eligible for paid leave. Generally, the employer decides whether the unused paid leave can be encashed or carried forward to the following year.

According to the organization's leave policy, the encashment process can be carried out during various time periods.

The encashment amount received by the employee while in service is fully taxable for both government and non-government workers.

The amount received by legal heirs on behalf of a deceased employee is fully exempt from tax.

The amount received at the time of retirement or resignation is partially taxable only for non-government employees. Allowed tax exemption on the encashed amount is the least of any of the following values:

Actual amount received from the organisation

Average salary (sum of basic salary and dearness allowance) of the last 10 months

Cash equivalent of unused leaves

Maximum limit fixed by the government (Rs. 25 Lakhs)

The balance encashed amount is taxable as salary income.

Although the calculation and taxation of leave encashment can appear complicated, you can simplify the process with the help of powerful payroll software. Zoho Payroll comes integrated with an intuitive HRMS tool that keeps tabs on employee leave balances.

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