Our system's leave encashment formula is based on MOM's guidelines found here.

### For a monthly rated employee, the formula depends on the number of average workdays per month as stated in the employee's pay scheme.

**Leave Encashment Formula**:** **

(Gross Salary x 12 months) / (Avg no. of workdays x 52 weeks) x No. of leave days left

Example:

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

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/month salary,

the yearly pay is $2,500 x 12 = **$30,000**

If this employee has 10 days of leave left, the encashment formula would be:

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

Workdays per | Gross Salary ($) per | Annual Leave Left | Encashment Formula ($) |

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

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