Leave Encashment Dilemma: Should Last Year's Salary Be Used for Calculations?

abhrajita1984
I need to know one thing regarding leave encashment. If leaves are being encashed for the last financial year, then should last financial year's salary be considered? Please let me know.

Abhrajita
KK!HR
Dear Abhrajita,

If leave salary is to correspond with the salary accruing at the time the leave is earned, that would render the calculations cumbersome and otiose when you consider the effort involved. The amount for each day's leave would vary with every pay band in which the leave was earned, leading to very complicated bookkeeping.

Next, when you avail leave, payment is made based on the current salary. Therefore, for encashment, it has to be on the same basis and cannot be of lesser value. Moreover, since leave is encashed or availed in the present context, only the present salary can form the basis.

Kind regards,
[Your Name]
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