1. Go to Leave > Leave Settings > Leave Type. 

2. Under the Leave Type section, either create a new leave type by clicking "Create", or modify an existing one by clicking "Edit".

2. Scroll down to the "Unused leaves" section. Here, you'll find options to manage how unused leave days are handled at the end of the year or upon resignation.

Encashment

This option allows you to specify the maximum number of unused leave days that can be encashed by an employee when they resign.

Allow Carry Forward and Encashment

Administrators need to configure the following:

• Preferred Option: Select either "Carry Forward" or "Encashment."
  • Your selection will determine the year-end leave encashment calculation.
  • If Carry Forward is chosen, the leave balance eligible for encashment is calculated after deducting the amount that can be carried forward, according to the maximum cap.
  • If Encashment is chosen, the eligible leave balance is calculated similarly, after considering the carry-forward cap.

Example:

• Carry Forward: If an employee has 10 days of unused leave, and your policy allows carrying forward up to 5 days, the remaining 5 days may be eligible for encashment.
• Encashment Example: If the policy caps carry forward at 5 days and an employee has 10 unused days, with the preferred option being encashment, the system will calculate the 5 days eligible for encashment after deducting the carry-forward cap.

3. Complete the remaining necessary details and click "Save."

Take a look at these guides on handling leave encashment during an employee's resignation and at the end of the leave year:

• Processing Leave Encashment Upon Employee Resignation 
• Processing Leave Encashment at the End of the Leave Year