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Leave Payout Formula:
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Leave payout calculation determines the monetary value of unused leave days based on an employee's daily rate. This is commonly used when employees leave a company or have accumulated leave that needs to be paid out.
The calculator uses the leave payout formula:
Where:
Explanation: This formula calculates the daily rate by dividing the monthly salary by the average number of working days per month, then multiplies by the number of leave days to determine the total payout.
Details: Accurate leave payout calculation ensures fair compensation for employees and compliance with labor regulations. It helps employers manage payroll expenses and maintain positive employee relations during separations or leave encashment.
Tips: Enter the monthly salary in currency units and the number of leave days to be paid out. Both values must be positive numbers. The calculator will compute the payout amount based on the standard formula.
Q1: Why is 21.67 used as the divisor?
A: 21.67 represents the average working days per month, calculated as 260 working days per year divided by 12 months.
Q2: Does this calculation vary by country?
A: Yes, some countries may use different divisors or calculation methods based on local labor laws and working day conventions.
Q3: Are weekends included in leave day calculation?
A: Typically, only working days are considered for leave payout calculations, unless otherwise specified in employment contracts.
Q4: How are partial leave days handled?
A: Partial days can be entered as decimals (e.g., 2.5 days) and will be calculated proportionally.
Q5: Should bonuses be included in the salary?
A: This depends on company policy and local regulations. Typically, only base salary is used, but some jurisdictions may require including certain allowances.