Leave encashment means getting paid for unused leave instead of taking time off, and it usually happens when an employee resigns or retires. The leave encashment amount is calculated based on the employee's basic salary and the number of unused leave days. In India, leave encashment has specific tax rules depending on whether the job is government or private, and usually only earned leave qualifies for it. Some companies also allow yearly leave encashment if the leave balance crosses a certain limit.
Definitions are general guidance. Your organisation's policies and applicable local requirements determine how a term is used in practice.
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