Calculate the cash monetary value of unused paid leaves under Section 45 of Nepal Labor Act 2074. Evaluate daily wage rates, compute year-end overflow cashouts, and settle full final leave clearances upon resignation.

Leave Encashment Scenarios (बिदा भुक्तानी नमुनाहरू)

Leave Balances & Salary

Values in NPR

Basic Monthly Salary (मासिक आधारभूत पारिश्रमिक)

Rs.

Salary Divisor Basis (दैनिक ज्याला गणना आधार)

Unused Home Leave Days (सञ्चित घर बिदा दिन)

Max statutory accumulation: 90 Days Overflow: days excess

Unused Sick Leave Days (सञ्चित बिरामी बिदा दिन)

Max statutory accumulation: 45 Days Overflow: days excess

Encashment Scenario

Total Net Leave Encashment

Home Leave Payout:

Sick Leave Payout:

Statutory Valuation & Cap Analysis (सञ्चित बिदा विवरण)

Daily Wage Calculation Rate

Home Leave Balance: / 90 days cap

Sick Leave Balance: / 45 days cap

Nepal Labor Act 2074 Statutory Leave Matrix (परिच्छेद ७)

Under Labor Act 2074 Sections 40–46, all permanent, contractual, and time-bound employees in Nepal are entitled to statutory paid leave categories:

Home Leave (घर बिदा)

1 Day per 20 Days Worked

Accrues ~18 days per fiscal year. Maximum legal accumulation allowed is 90 days. Excess must be encashed at year end.

Sick Leave (बिरामी बिदा)

12 Days Fully Paid

Proportionate for employees working less than 1 year. Maximum accumulation allowed is 45 days.

Maternity & Paternity

14 Weeks & 15 Days

Female workers: 14 weeks maternity (60 days fully paid). Male workers: 15 days paternity with full pay. Cannot be encashed.

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Frequently Asked Questions on Leave Encashment in Nepal

Chapter 7 of the Labor Act 2074 provides for: (1) Public Holidays: 13 days (plus 1 day for women on Women's Day), (2) Home Leave (घर बिदा): 1 day for every 20 days worked (~18 days/year), (3) Sick Leave (बिरामी बिदा): 12 days/year with full pay, (4) Mourning Leave (किरिया बिदा): 15 days, (5) Maternity Leave: 14 weeks (60 days fully paid), and (6) Paternity Leave: 15 days fully paid.

Section 45 mandates that an employee can accumulate up to a maximum of 90 days of Home Leave and 45 days of Sick Leave. Any unavailed leave accumulated beyond these thresholds must be encashed at the end of each fiscal year.

Standard Formula: Daily Wage Rate = Last Drawn Basic Monthly Salary ÷ 30. However, if the enterprise's registered bylaws or collective bargaining agreement specify a 26-day working month basis, then Monthly Basic Salary ÷ 26 is used.

No. Section 45(3) clearly specifies that upon separation from service for any reason (resignation, retirement, or dismissal), the employee is entitled to receive monetary encashment for all accrued Home Leave and Sick Leave balances.

Yes. Leave encashment is treated as employment income under the Income Tax Act 2058. During ongoing service, it is taxed with monthly payroll TDS. Upon retirement, statutory retirement exemptions apply.

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