Leave Encashment & Notice Pay Calculator (India)
Estimate unused leave payout and notice-period buyout for your final settlement.
What Is the Leave Encashment & Notice Pay Calculator (India)?
How Is the Leave Encashment & Notice Pay Calculator (India) Calculated?
Leave Encashment: daily wage rate (monthly Basic + DA ÷ 30) × number of unused leave days. Notice Pay: daily wage rate × the number of notice-period days not actually served, whether by the employee buying out the shortfall or the employer paying it in lieu of notice.
Leave Encashment & Notice Pay Calculator (India) Example
An employee with ₹45,000 Basic+DA encashing 15 unused leave days receives (₹45,000 ÷ 30) × 15 = ₹22,500. Separately, if their 30-day notice period is cut short by 20 days served, notice pay owed is (₹60,000 ÷ 30) × 10 = ₹20,000.
How to Use the Leave Encashment & Notice Pay Calculator (India)
Step 1
Switch between the Leave Encashment and Notice Pay tabs depending on what you're calculating.
Step 2
For leave encashment, enter your Basic + DA and the number of unused leave days.
Step 3
For notice pay, enter your monthly salary, the notice period, and how many days you actually served.
Step 4
Review the calculated payout for each.
Benefits
- Covers two related full-and-final settlement calculations in one tool.
- Uses the standard 30-day monthly divisor convention for daily rate calculations.
- Helps you sanity-check your final settlement statement from HR.
Common Leave Encashment & Notice Pay Calculator (India) Scenarios
Scenario 1
Estimating your final payout before resigning or being relieved from a job.
Scenario 2
Checking whether an employer's notice pay deduction matches the expected calculation.
Scenario 3
HR teams quickly calculating leave encashment or notice buyout amounts for departing employees.
Understanding Your Result
Leave encashment is money owed to you for earned leave you didn't use. Notice pay is either money you owe your employer (if you leave early without serving full notice) or money your employer owes you (if they end your employment without full notice) — check your employment contract to see which direction applies.
Tips
- Check your company's leave policy — some cap the number of leave days eligible for encashment.
- Notice pay is typically calculated on gross salary, while leave encashment often uses only Basic + DA — confirm which your employer uses.
- Government employees generally get full tax exemption on leave encashment; private-sector rules differ and have exemption limits.
Common Mistakes
- Using gross salary instead of Basic + DA for leave encashment when your company policy specifies otherwise.
- Forgetting that notice pay can apply in either direction — employee-owed or employer-owed — depending on who ends the contract early.
- Assuming leave encashment is always tax-free — private-sector exemption is capped, unlike for government employees.
Frequently Asked Questions
Is leave encashment taxable?
For government employees it's typically fully exempt; for private-sector employees it's exempt up to a statutory cap, with any excess taxable as salary income.
Who pays notice pay — the employee or employer?
It depends on who ends the employment early. If an employee leaves without serving full notice, they typically pay the employer; if the employer terminates without full notice, they typically pay the employee.
Can my employer refuse to pay unused leave encashment?
This depends on your employment contract and local labor law — many companies pay out unused earned leave at resignation or retirement, but policies vary, so check your contract.
Is there a tax exemption limit on leave encashment?
Yes, for government and many private-sector employees, a portion of leave encashment (especially at retirement) is tax-exempt up to a government-specified limit — amounts above that limit are taxable as salary income.
How is notice pay calculated if I resign without serving the full notice period?
It's typically calculated as your per-day salary multiplied by the number of notice days short, though exact terms depend on your employment contract.
Does unused leave always carry forward, or can it expire?
This depends entirely on company policy — some employers allow unlimited carry-forward and encashment, while others cap how many days can be carried over or encashed, so check your specific leave policy.
Who typically pays notice pay — the employee or employer?
Either party can owe notice pay depending on who initiates the early exit — an employee leaving without serving full notice may owe the employer, while an employer terminating without notice may owe the employee.
Is leave encashment paid only at the time of resignation?
No — some companies also allow encashing a portion of unused leave annually while still employed, in addition to a final encashment at separation, depending on company policy.
Does this calculator handle both government and private sector rules?
It applies general leave encashment and notice pay logic — specific exemption limits and rules can differ between government and private-sector employment, so verify against your employer's policy and current tax rules.
Important Information
These are general estimates — actual full-and-final settlement calculations depend on your specific employment contract and company policy.
Last updated: July 26, 2026