Which divisor should I use?

Whatever your policy states. If it is silent, thirty is the more common practice in private employment, but the twenty-six convention appears wherever the Gratuity Act is the reference point.

Salary & HRstatutoryIndia only

Leave Encashment Calculator

Payment for unused leave, with both divisor conventions shown. Thirty days is the common contractual figure and twenty-six the statutory one, and the gap between them is over thirteen percent on the same salary.

Also called: leave encashment, unused leave payout.

Leave encashment

₹90,000

₹90,000 for 45 days at a daily rate of ₹2,000. On the other divisor it would be ₹1,03,846, a difference of ₹13,846.

Daily rate

₹2,000

On the other divisor

₹1,03,846

Difference between the two conventions

₹13,846

Months of salary this represents

1.5

How this is calculated

An estimate, not an offer or a guarantee. Projected returns assume the rate you entered holds for the whole term, which no market does.

Method and background

This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for India change on a published schedule; the effective date is shown on every rule-based tool.

How this is calculated

Encashment is a daily rate multiplied by unused days. The only real question is what a daily rate means. Dividing by thirty treats every day of the month as payable; dividing by twenty-six, the convention the Gratuity Act uses, treats four days a month as non-working and so produces a larger daily figure. Which applies is a matter of your contract or policy, and both are shown because the difference is not small.

amount = monthly salary / days per month * unused leave days

S: Monthly salary (currency)
d: Days per month, by convention (days)
L: Unused leave days (days)

Worked examples

Each of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.

forty-five days on a thirty-day divisor

Monthly salary the encashment is computed on: ₹60,000
Unused leave days: 45
Days per month used: 30 (common contractual)

Leave encashment₹90,000

arithmetic identity

Open this example

the same leave on the statutory divisor

Monthly salary the encashment is computed on: ₹60,000
Unused leave days: 45
Days per month used: 26 (statutory, as for gratuity)

Leave encashment₹1,03,846

boundary: the 15% gap between the two conventions

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no unused leave is no payment

Monthly salary the encashment is computed on: ₹60,000
Unused leave days: 0
Days per month used: 30 (common contractual)

Leave encashment₹0

degenerate case

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Method and limits

What it assumes

The salary entered is whatever your policy says the encashment is computed on.

What it deliberately does not model

Tax treatment differs sharply between government and private employment and between resignation and retirement, and is not applied.
Caps on the number of days that can be carried forward are a policy matter and are not enforced here.

Sources

Payment of Gratuity Act, 1972 (primary government)

Formula version 1.0.0 · definition 1.0.0 · India · Report a problem with this calculator

Frequently asked questions

Which divisor should I use?: Whatever your policy states. If it is silent, thirty is the more common practice in private employment, but the twenty-six convention appears wherever the Gratuity Act is the reference point.