Employee Tickets feature allows you to manage Leave encashment by setting up a Leave encashment policy that will enable the employees to raise a direct ticket for approval to encash their unused leaves.
Steps to configure Leave encashment policy
Configuring a policy involves three steps:
- Setting up Leave encashment policy details
- Selecting employees
- Review and Save
Step 1: Setting up policy details
Navigate to Settings > Payroll > Leave encashment policy > Click on "Add New"
Set up the policy based on the parameters as below:
Policy details :
- Enter a clear and specific name in the Policy name field. This serves as the identifier for the policy throughout the system. This is a required field and must be completed before proceeding.
- In the Description field, input a brief summary that explains the intent or scope of the policy. While optional, adding a description enhances clarity and aids in internal documentation and policy reviews.
- Use the Applicable leave type for encashment dropdown to select the leave category eligible for encashment, such as “Vacation.” This field is mandatory. The policy will apply only to the selected leave type.
Leave encashment calculation: The next parameter is to configure how the leave encashment amount should be calculated.
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Define the formula to calculate leave encashment
You can define a formula to calculate the pay amount based on salary components and the number of unused leave days.
Salary component
Choose whether the encashment should be based on: Basic salary or Basic salary + allowances
If you select Basic salary + allowances, a list of allowances will appear. You can select multiple components such as: Schooling, Transportation, Mobile phone or Housing
Working day type
Select how the system should divide the salary to calculate the daily rate.
The options are: Calendar days, Working days and Custom days
Formula structure
The formula used by the system is:
(Salary Component ÷ Working Day Type) × Number of Unused Leaves
For example, if an employee is eligible for five days of leave encashment, and the selected working day type is calendar days, the salary is divided by the number of calendar days in the month, then multiplied by five.
Criteria: After defining the encashment calculation, configure the eligibility criteria that must be met for employees to request leave encashment.
Define eligibility rules for encashment
You can set up specific conditions that restrict when and how leave encashment requests can be submitted. The following criteria can be enabled as needed:
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Minimum accrued leave days
Define the minimum number of leave days an employee must have to be eligible for encashment. For example, if set to 1, employees must have at least one accrued day available. -
Minimum job tenure
Specify how long an employee must have worked at the company before they can request leave encashment. If set to 6 months, only employees with six or more months of service can apply. -
Maximum encashment limit
Limit the number of leave days that can be encashed per request or within a given period. For example, if the maximum is set to 5, employees will not be able to encash more than 5 days at a time.
Restrictions: Toggle this setting on to prevent employees from submitting leave encashment requests while they are in their probation period. When enabled, the system will automatically block such requests until the employee completes probation.
Step 2: Selecting Employees
Once the policy has been configured, the next step is to assign employees to the leave encashment policy.
Use the employee selector to search by name or ID, and include or exclude individuals accordingly. The list on the right displays employees currently included in the policy, while the list on the left shows those who are excluded. Use the "Move all" and "Remove all" options for quick bulk updates.
Only employees who are assigned to the associated leave type (e.g., Vacation) will be available for selection. Ensure the correct employees are added so they become eligible for leave encashment according to the policy rules.
Step 3: Review & Save policy
In the final step, review all the configured settings before saving the policy. If any edits are required, click the Edit button next to the relevant section. Once verified, click Save to finalize the policy setup.
Once the policy is configured you can set up the Approval flow for Leave encashment.