How is Leave Encashment at Retirement Calculated

How is Leave Encashment at Retirement Calculated

If you are a Govt employee and want to know how is leave encashment at retirement calculated then read it completely to understand. Whenever any civil servant get retirement according to the rule of encashment then leave encashment will be the right of an employee. When you have greater number of leaves in your credit then you will gain more encashment. Because the encashment is granted to any if he/she has more leaves are credit but the limit is 365 day equal to one year.

Leave Encashment Rules 2020

Following are the general rules for any civil servant who want to get leave encashment on retirement;

♦ Govt servant can avail leave encashment after minimum 30 years of service or at the age of 60 years.

♦ The pay is calculated that he/she was being drawn during the period of last days i.e if an employee has 200 days leave in his/her credit then the pay of last 200 days is calculated for the encashment purpose.

♦ No you can calculate the leave encashment formulae in Pakistan before retirement given below;

Leave Encashment Formula  =  Basic Pay x 5.918 x Leaves in Credit / 180

How is 365 days leave encashment calculated

Now we will help you to calculate your leave encashment without any excel document or calculator. Suppose, at the time of retirement, you have 365 days of leaves are credit. The time of retirement (31st May, 2020) your basic pay is Rs. 45,500. Now you will get your encashment according to the rules are given below:

1st January 2020 to 31st January, 2020 Monthly Salary [ Total 5 Months]  =  45, 500

1st June 2019 to 31st January, 2019 Monthly Salary [ Total 7 Months]   =  41, 000

Period Basic Pay Encashment Amount
05 Months – 151 Days (2020) 45, 500 225,886
07 Months – 214 Days (2019) 41, 000 288,469


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