Where to add the leave encashment formula?

According to labor law, salaried employees are entitled to a minimum number of paid leaves every year. However, employees may not always use all their entitled leave days in a year. Many employers allow employees to carry forward such unutilized paid leaves, resulting in an accumulated leave balance at the time of retirement or resignation. This means that employers must compensate for these unutilized leave days, a concept known as leave encashment.

Steps to Add a Leave Encashment Formula

1. Go to: Payroll → Settings → Leave Encashments.

2. Click on Add Encashment Policy.

   

3. In the pop-up, enter the Policy Name and input the Leave Encashment Formula.

4. Click on +Existing Salary Component to view available components. Select a component to insert it into the formula.

   

5. After updating the formula, click Save.