Leave Encashment
Leave Encahment
Leave Encashment is the amount of money an employee receives for foregoing their leave. You can only apply for Leave Encashment for Leave Types that are encashable.
1. Requirements
In order to make Leave Encashment, you should prepare the following documents:
Leave Type for Employee, Leave Policy, Leave Period, and Salary Structure
Assignment of Salary Structure
2. How to create a Leave Encashment
Click on New from the Leave Encashment list.
Select the Leave Period.
Select the Employee. When you select an Employee, his/her Department is automatically brought up.
Select the category of leave for which the leave is being paid.
Mark the "Allow Encashment" check box in the Leave Type to ensure that the Leave Type can be encashed.
To receive payment by Salary Slip, select the Encashment Date.
The funds will be disbursed in that very Payroll Entry as per the date you select.
Save and submit.
Cash for Leave
When you select Employee and Leave Type, the Leave Balance and Encashable Days (which is the total leave balance reduced by the threshold days defined in Leave Type) will be displayed along with the Encashment Amount, which is computed based on the Leave Encashment per day as configured in the Employee's assigned Salary Structure.
3. Methods of payment of leave encashment
You can make the encashment value in Frappe HR via a Salary Slip or a Payment Entry.
3.1 Payment via Payment Entry
You have to check the box labeled "Pay via Payment Entry" in order to pay the Leave Encashment value.
Then you can select the Payable Account and the Expense Account.
Click on the "Create Payment Entry" button once you have submitted the record. This will lead you to the Payment Entry Form, and here you can fill in the details, save it, and submit it.
3.2 Paying via Salary Slip
In order to pay the Leave Encashment amount by means of Salary Slip, you must uncheck the checkbox alongside "Pay via Payment Entry."
Select the date for the encashment.The amount shall be disbursed in that Payroll Entry based on the date you select.Save and Send. When you process a Leave Encashment for an Employee, Frappe HR automatically adds an Additional Salary to the Employee's Salary Slip upon processing the payroll.