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How does Payboy calculate leave encashment?
How does Payboy calculate leave encashment?

All about Leave Encashment and the Prorated Calculation Formula

Nigel Lim avatar
Written by Nigel Lim
Updated over a week ago

Our system's leave encashment formula is based on MOM's guidelines, which you may refer to this link for more information.

To view the current pay scheme of the employee, you can navigate to Employees > All Employees > View Employee > Employment Details > Edit Current Pay Scheme

For employees on Monthly Pay, the formula depends on the number of average workdays per month indicated in the employee's pay scheme.

Leave Encashment Formula


The employee works a 5 day work week in the above pay scheme and earns $2,500/month.

In this case, since he works 5 days a week on average and there are 52 weeks in a year, the total number of his working days is 5 days x 52 weeks = 260 days.

To calculate the gross rate of pay per day based on a $2,500/monthly salary,

the yearly pay will be $2,500 x 12months = $30,000

If this employee has 10 days of leave left, the encashment formula would be:
$30,000/260days x 10 days = $1,153.85

Workdays per year

Gross Salary ($) per year

Annual Leave Left

Encashment Formula ($)

260 days



$30,000/260 x 10 days = $1,153.85

Feel free to contact us if you face any difficulties through the support chat icon on the bottom right of the screen or email We will get back to you within 3 working days.

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