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 year

Gross Salary ($) per year

Annual Leave Left

Encashment Formula ($)

260 days

30,000

10

$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 support@payboy.biz. We will get back to you within 3 working days.

Did this answer your question?