01
Enter your salary and leave
Add your monthly Basic + DA, the leave days you are encashing, and your years of service.
Leave Encashment Calculator
Value your unused leave and its tax-free part.
Updated Reviewed by Sajid Hussain· Editor
Try it with your numbers
Results update in real time as you type — no submit needed.
Your numbers
Leave Encashment bills sellers in Indian Rupee (INR), so this calculator works in INR — not your selected US Dollar ($). Every figure below matches your real Leave Encashment statement. Localised USD marketplaces are coming soon.
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Why trust this calculator
Last updated
June 14, 2026
Coverage
Region-specific
Privacy
Calculated in-browser · no data stored
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India Salary Tool
What Is a Leave Encashment Calculator?
A leave encashment calculator values the payment for your unused earned leave and shows how much is tax-free under Section 10(10AA) — and how much is taxed.
It values your leave correctly. Encashment is your unused leave days times a per-day salary of Basic + DA ÷ 30 — not your full CTC. The calculator gets the base right, so the figure matches what your employer actually pays.
It applies the real exemption rules — and the tax. Government employees are fully exempt on retirement. For everyone else, the exemption is the least of four limits; the calculator shows which one binds, taxes the rest at your slab plus 4% cess, and tells you the net you actually keep.
It uses the ₹25 lakh limit. The lifetime cap was raised from ₹3 lakh to ₹25 lakh in 2023. The calculator uses the current figure, unlike older tools and articles still stuck on ₹3 lakh.
It separates retirement from in-service. Leave encashed while still working is fully taxable — the exemption is only for retirement or resignation. The calculator handles both, so there are no surprises at filing time.
Quick facts
- Section
- 10(10AA)
- Per-day basis
- (Basic + DA) ÷ 30
- Govt employees
- Fully exempt
- Non-govt limit
- ₹25 lakh (lifetime)
- Leave cap
- 30 days / year
- Free to use
- No sign-up needed
How It Works
Calculate Your Leave Encashment in Three Steps
02
Pick your situation
Choose government or private, and whether the encashment is on retirement or during service.
03
See the tax split
See the total encashment, the exempt amount, the taxable part, and which limit caps the exemption.
Steps to use the Leave Encashment Calculator: Enter your salary and leave, Pick your situation, See the tax split.
The Formula
How Leave Encashment and Its Tax Are Worked Out
01
Leave encashment
Encashment = leave days × (Basic+DA ÷ 30)
Your per-day salary is the monthly Basic + DA divided by 30, multiplied by the number of leave days encashed.
Example: 350 × (₹60,000 ÷ 30) = ₹7,00,000
02
Exempt amount (non-govt)
Exempt = least of 4 limits
The exemption is the least of: actual amount, ₹25 lakh, 10 months' salary, and leave at 30 days per year of service.
Example: 10 months × ₹60,000 = ₹6,00,000 (binds)
03
Taxable amount
Taxable = encashment − exempt
Whatever is above the exemption is added to your income and taxed at your slab. Government employees have nil taxable.
Example: ₹7,00,000 − ₹6,00,000 = ₹1,00,000
04
Tax on the taxable part
Tax = taxable × slab% × 1.04
The taxable part is taxed at your income-tax slab plus 4% health and education cess. Your net in hand is the encashment minus this tax.
Example: ₹1,00,000 × 30% × 1.04 = ₹31,200 → net ₹6,68,800
Worked Example
Step-by-Step Walkthrough (private, ₹60,000 Basic+DA, 350 days)
Currency note: the example below uses a benchmark scenario priced in Indian Rupee (INR). Values are converted to US Dollar (USD) at the latest exchange rate so you can compare against your own numbers.
Scenario
A private employee retiring after 20 years, encashing 350 days at $60,000.00 Basic + DA.
1
Step 1 · Encashment value
Per-day salary is $60,000.00 ÷ 30 = $2,000.00, times 350 days.
Encashment = $700,000.00
2
Step 2 · Exempt amount
The least of the four limits — here 10 months' salary binds.
Exempt = $600,000.00
3
Step 3 · Taxable part
Whatever is above the exemption is taxed at your slab.
Taxable = $100,000.00
4
Step 4 · Tax and net
The taxable part is taxed at your 30% slab plus 4% cess.
Tax = $31,200.00 · Net = $668,800.00
The takeaway
Encashing 350 days at $60,000.00 Basic + DA pays $700,000.00, of which $600,000.00 is tax-free; the $100,000.00 taxable part costs $31,200.00 at the 30% slab, leaving $668,800.00 in hand. A government employee in the same case would keep the full amount tax-free.
Exemption limits
The Four Limits That Cap the Exemption (non-govt)
| Metric | Poor | Average | Good | Excellent |
|---|---|---|---|---|
Actual amount Limit 1 | Whatever you receive | |||
Lifetime cap Limit 2 · since FY 2023-24 | ₹25,00,000 | |||
10 months' salary Limit 3 | 10 × avg Basic+DA | |||
Leave at 30 days/year Limit 4 | 30 × years × per-day |
Comparison
Calcrux vs Generic Calculators
| Feature | Calcrux (Free) | Generic | Manual |
|---|---|---|---|
| All four exemption limits | |||
| Current ₹25 lakh limit (not ₹3L) | |||
| Shows which limit binds | |||
| Tax on taxable part → net in hand | |||
| Lifetime ₹25L tracking (prior claims) | |||
| Govt vs non-govt handling | |||
| In-service (fully taxable) case | |||
| Free, no sign-up required |
Common Mistakes
Leave Encashment Mistakes to Avoid
Using the old ₹3 lakh limit
Why it matters
The lifetime exemption was raised to ₹25 lakh in 2023, but many calculators and articles still use ₹3 lakh, overstating the tax.
Fix
Use the ₹25 lakh limit — this calculator does. Remember it is reduced by exemptions claimed in the past.
Using full salary instead of Basic + DA
Why it matters
Leave encashment is based on Basic + DA, not gross or CTC. Using the full salary overstates the amount.
Fix
Enter only monthly Basic + DA; the per-day rate is that divided by 30.
Expecting an exemption during service
Why it matters
Leave encashed while still employed is fully taxable — the exemption is only on retirement or resignation.
Fix
Turn off the retirement toggle to see the in-service case, where the whole amount is taxed.
Ignoring the 30-days-per-year cap
Why it matters
Even with a big leave balance, the exemption counts at most 30 days per completed year of service.
Fix
Enter your years of service so the calculator applies the cap correctly.
Forgetting earlier claims
Why it matters
The ₹25 lakh limit is once-in-a-lifetime across employers; an earlier exemption reduces what remains.
Fix
Subtract any leave encashment exemption you have already claimed when planning a new one.
Pro Tips
Make the Most of Leave Encashment
Encash on retirement, not in service
The exemption applies only on retirement or resignation. Encashing while employed makes the whole amount taxable.
Track your lifetime ₹25 lakh limit
The cap spans all employers and your whole career. Keep a note of past exemptions so you know what is left.
Know your average salary matters
The exemption uses the average Basic + DA of your last 10 months — a final-year raise can lift the exempt amount.
Plan the timing of retirement
Retiring early in a financial year can spread the taxable part against a lower full-year income — worth modelling.
Keep documentation
Retain the leave record and computation; the exemption is something the tax department can ask you to substantiate.
Who Uses This
Who Uses This Leave Encashment Calculator
The Leave Encashment Calculator works across every stage of the workflow.
Employees nearing retirement
Someone retiring checks how much of their accumulated leave encashment will be tax-free.
People changing jobs
A resigning employee works out the encashment and the taxable part on their final settlement.
Government employees
A government retiree confirms their full leave encashment is exempt under Section 10(10AA).
HR and payroll teams
HR estimates the exempt and taxable split for an employee's full and final settlement.
Tax planners
An adviser checks how much of the ₹25 lakh lifetime limit a client has left.
Glossary
Key Leave Encashment Terms
Every important term you'll encounter in this calculator and the broader topic.
- Leave Encashment
- Payment for unused earned (privilege) leave, usually paid on retirement or resignation, based on Basic + DA.
- Section 10(10AA)
- The income-tax provision exempting leave encashment on retirement — fully for government staff, capped for others.
- ₹25 Lakh Limit
- The lifetime cap on tax-free leave encashment for non-government employees, raised from ₹3 lakh in 2023.
- Per-Day Salary
- Monthly Basic + DA divided by 30 — the daily rate used to value each encashed leave day.
- 10 Months' Salary
- Ten times the average monthly Basic + DA of the last 10 months — one of the four exemption limits.
- 30-Days Cap
- The exemption counts a maximum of 30 leave days for each completed year of service.
- Health & Education Cess
- A 4% surcharge added on top of the slab tax — so the taxable part of leave encashment is taxed at slab rate × 1.04.
Help & answers
Frequently asked questions
Everything you need to know about how the Leave Encashment Calculator works.
01What is a leave encashment calculator?
A leave encashment calculator values the payment for your unused earned leave and works out how much is tax-free. You enter your Basic + DA, the leave days and years of service; it returns the encashment, the exempt amount under Section 10(10AA), and the taxable part.
02How is leave encashment calculated?
Leave encashment = leave days encashed × per-day salary, where per-day salary = monthly (Basic + DA) ÷ 30. For example, 350 days at ₹60,000 Basic + DA is 350 × ₹2,000 = ₹7,00,000.
03Is leave encashment taxable?
On retirement, government employees are fully exempt. Non-government employees get an exemption up to the least of four limits, and only the excess is taxable. Leave encashed while still in service is fully taxable.
04What is the leave encashment exemption limit?
For non-government employees, the exemption is the least of: the actual amount, ₹25 lakh (a lifetime limit raised from ₹3 lakh in 2023), 10 months' average salary, and the cash value of leave at 30 days per year of service.
05What is the ₹25 lakh leave encashment limit?
It is a once-in-a-lifetime cap on the tax-free leave encashment a non-government employee can claim across all employers. Raised from ₹3 lakh to ₹25 lakh effective from FY 2023-24, it is reduced by any exemption claimed earlier.
06How much tax do I pay on leave encashment?
Only the taxable part is taxed, at your income-tax slab plus 4% cess. If ₹1 lakh is taxable at the 30% slab, the tax is about ₹31,200, so you keep the rest. The calculator shows this tax and your net in hand.
07Does a previous leave encashment exemption reduce my limit?
Yes. The ₹25 lakh cap is cumulative for life, not per job. If you claimed ₹5 lakh exemption at an earlier employer, only ₹20 lakh is left. Enter the amount already claimed and the calculator adjusts the limit.
08How is per-day salary calculated for leave encashment?
Per-day salary is your monthly Basic + DA divided by 30. Dearness Allowance counts only if it forms part of retirement benefits. Allowances like HRA and special pay are excluded.
09Is leave encashment during service taxable?
Yes, fully. The Section 10(10AA) exemption applies only when leave is encashed on retirement or resignation. If you encash leave while still employed, the entire amount is taxable at your slab.
10How many leave days can be encashed tax-free?
For the exemption, the law counts a maximum of 30 days of leave for each completed year of service. Encashing more days is allowed, but the days above this cap do not get the exemption.
11Are government employees fully exempt?
Yes. Central and state government employees receive their entire leave encashment on retirement tax-free under Section 10(10AA), with no upper limit. Only non-government employees face the four-way cap.
12Does leave encashment count under the new tax regime?
Yes, the Section 10(10AA) exemption on retirement applies under both the old and new regimes. The taxable portion, if any, is added to income and taxed at the regime's slab rates.
13What salary is used — last drawn or average?
The exemption uses the average monthly salary (Basic + DA) of the 10 months immediately before retirement. This calculator uses the monthly Basic + DA you enter as that average for a close estimate.
14Is this leave encashment calculator free and accurate?
Yes — it is free and applies the Section 10(10AA) rules with the ₹25 lakh limit. Because the exemption depends on your 10-month average salary and prior claims, treat large cases as an estimate and confirm with your employer or a tax adviser.
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