Go to Leave > Leave Settings > Leave Type. 

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

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:

Select your Preferred Method: Carry Forward or Encashment. Your selection will determine the year-end leave encashment calculation.

• Carry Forward: The encashable leave is the total unused leave minus the number of days allowed to be carried forward.
• Encashment: The calculation also considers the carry-forward limit, with only the excess days being eligible for encashment.

Example:

• Carry Forward: If an employee has 10 unused leave days and the policy allows 5 days to be carried forward, the remaining 5 days can be encashed.
• Encashment: With the same leave balance and cap, 5 days would be eligible for encashment, after applying the carry-forward limit.

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