Question

With reference to staff benefits, explain the following:

Encashment of leave

Answer 1

• Encashment of leave refers to the facility provided to employees where they can receive monetary compensation for unused leave.
• If an employee has accumulated leave that they have not availed of during their service, they can opt to encash it instead of taking time off. This is typically allowed at the time of retirement, resignation, or during certain occasions as per the employer’s policy.
• The amount paid is based on the number of unused leave days and the employee’s last drawn salary. Leave encashment serves as a financial benefit and reward for regular attendance and is considered a part of staff welfare and retirement planning.