- Leave encashment is generally calculated using either of two common formulas — (Basic / 365) or (Gross / 365).
- These formulas divide the annual basic or gross salary by 365 days to get the daily rate.
- The daily rate is then multiplied by the number of leave days to be encashed.
- For customized formulas or organization-specific policies, it’s best to consult a qualified HR consultant.
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