Leave Encashment Calculator Pakistan
Calculate the value of unused annual leave that an employee can encash upon termination or during employment. Under Punjab's new labour code, encashment of unused leave is at full pay, not just basic salary
Introduction
Annual leave encashment is an important component of employee benefits in Pakistan. When employees leave their jobs or choose to encash unused leave, they are entitled to receive payment for those days. Punjab's new labour code, enacted in February 2026, increased minimum annual leave from 14 to 18 calendar days and clarified that encashment is at full pay, not just basic salary [citation:4].
What is this calculator?
The Leave Encashment Calculator Pakistan computes the monetary value of unused annual leave days based on the employee's salary. It uses the daily wage rate derived from monthly salary and multiplies by the number of unused leave days.
Formula
Daily Wage Rate = Monthly Salary ÷ 30
Leave Encashment Value = Unused Leave Days × Daily Wage Rate
Important terms
- Annual Leave： Paid time off earned after 12 months of continuous service. Minimum 18 calendar days under Punjab's 2026 labour code [citation:4].
- Encashment： Converting unused leave days into monetary payment.
- Full Pay： Encashment is based on total salary, not just basic salary [citation:4].
How to use the calculator
- Enter the employee's monthly salary (PKR).
- Enter the unused leave days.
- Click Calculate Encashment.
Practical Pakistan-specific example
Example： Monthly salary Rs. 60,000, 15 unused leave days
- Daily rate = 60,000 ÷ 30 = Rs. 2,000
- Encashment = 15 × 2,000 = Rs. 30,000
Who can use the calculator
- Employees： Understanding leave encashment value.
- HR professionals： Calculating final settlements.
- Business owners： Budgeting for leave liabilities.
Disclaimer
This calculator provides an estimate based on full salary encashment. Actual entitlements may vary based on employment contract, company policy, and provincial labour laws. Consult an HR professional for precise calculations.