Leave Encashment Calculator 2026
Calculate the leave encashment amount and the tax-free portion when an employee retires or resigns.
- Amount + tax exemption
- 30 or 26-day basis
- ₹25 lakh limit
- Government & private
Not an official government calculator. This free tool is only to make your HR and payroll work easier. Tax and labour rules change every year, so treat results as estimates and verify with the official notification or your CA before filing or paying. Rules last reviewed on 23 October 2026.
Leave Encashment Calculator
For tax exemption
Basic + DA + commission. Leave blank to use the Basic + DA above.
Exemption is the least of
- Actual leave encashment received
- ₹60,000
- Statutory limit (₹25 lakh less earlier exemptions)
- ₹25,00,000
- 10 months' average salary
- ₹4,00,000
- Cash value of 45 days (max 30 days per completed year)
- ₹60,000
- Exempt amount
- ₹60,000
Leave encashment example
A private-sector employee resigns after 10 years with 45 days of earned leave and Basic + DA of ₹40,000.
- Encashment: ₹40,000 ÷ 30 × 45 = ₹60,000
- 10 months' average salary: ₹4,00,000
- Cash value of leave (45 days, within 30 × 10 = 300 days): ₹60,000
- Statutory limit: ₹25,00,000
The full ₹60,000 is tax-free. Add it to the exit settlement with the full & final calculator.
Frequently Asked Questions
How is leave encashment calculated?
Leave encashment = (monthly Basic + DA ÷ 30) × number of leave days. Some employers divide by 26 working days or use gross salary — check your leave policy.
Is leave encashment taxable?
Leave encashed while in service is fully taxable. On retirement or resignation, government employees are fully exempt; other employees are exempt up to the least of actual amount, ₹25 lakh, 10 months' average salary, and the cash value of leave (max 30 days per completed year).
What is the ₹25 lakh leave encashment limit?
Since 1 April 2023 the tax exemption limit for non-government employees is ₹25 lakh (earlier ₹3 lakh). It is a lifetime limit across all employers.
Do the Labour Codes allow annual leave encashment?
The OSH Code allows workers to carry forward up to 30 days of annual leave and to encash unused leave at the end of the calendar year, as well as on exit.
Is this an official leave encashment calculator?
No. It is a free, unofficial tool by XoMB HR for quick estimates. Confirm tax treatment with your CA.
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This is not an official calculator of the Government of India, the Income Tax Department, EPFO, ESIC or any state government. It is a free tool by XoMB Technologies to make everyday HR work easier. Rules, rates and limits change every year through budgets, notifications and court rulings, and your organisation's policy may differ. Results are estimates only and are not legal, tax or financial advice — confirm with the official source or a qualified CA / labour law consultant before acting. Rules last reviewed on 23 October 2026.