Leave Encashment

What is Leave Encashment?

Leave Encashment is the amount of money received by an employee in exchange for the granted leaves, and not utilized in a year. As per law, every employee is entitled to some paid leaves, however, some don’t require much to use in a year. Those leaves are carryforward or encash after a year. 

Sometimes encashment is done at the time of resignation or retirement from the company. Many companies also allow employees to hold forward paid leaves if they are not used in a single year. 

Benefits Of Leave Encashment

• The sum collected on account of leave encashment is completely payable in your hands, whether you are in the public or private sector. 
• There are not any fixed rules for leave encashment, but it is done annually. 
• Employees can save it for extra money earning, and leaves won’t be wasted. 

Also, See: Earned leave (EL) | Leave Without Pay (LWP)