Earned leave (EL)

Meaning of earned leave

Earned leave (EL) refers to paid time off that employees accumulate for every month of service. It allows them to take planned leave without losing pay. It’s also called privilege leave in some organizations.

Purpose of earned leave in employee benefits

Earned leave helps employees take time off for rest, personal commitments, or travel while retaining their salary. It promotes employee well-being and acts as a retention tool by rewarding consistent service.

Eligibility for earned leave

• Full-time employees: Eligible for earned leave as per company or government rules.
• Probationary or contractual staff: Eligibility depends on policy; some employers offer pro-rata EL.
• Minimum service duration: Usually applicable after completing six months to one year of continuous service.

Earned leave rules

For state government employees

• Entitled to 30 days of EL per year (accruing at 2.5 days per month).
• Can accumulate up to 180-300 days, depending on the state.
• Leave can be carried forward within the specified limit.
• Encashment is allowed on retirement or separation.

For private sector employees

• Generally, 12–30 days of EL per year depending on company policy.
• Accrual may be monthly (e.g., 1.5–2.5 days per month).
• Carry forward limit is typically 30–60 days, with some exceptions up to 120 days.
• Encashment rules differ by employer and are usually available at resignation or retirement.

Application of earned leave

• Employees must apply through the HR portal or submit a written leave request.
• Advance notice of 7–15 days is typically required.
• Leave approval depends on business needs and reporting manager consent.
• Extended leave (e.g., beyond 30 days) may need special approval.

Encashment of earned leave

Employees can encash unused EL upon retirement, resignation, or when it exceeds the carry-forward limit.

Formula:
Encashment amount = (Monthly salary ÷ 22) × EL days available

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Earned leave vs other types of leave

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How to apply for earned leave?

Employees can apply through their HRMS or email.

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Earned leave application template

To,
The HR Manager
[Company Name]

Subject: Application for earned leave

Dear [Sir/Madam],

I would like to apply for earned leave for [number of days], from [start date] to [end date], due to [reason]. As per my records, I currently have [EL balance] days of earned leave available.

Kindly process and approve my request.

Thank you for your consideration.

Warm regards,
[Your Name]
[Employee ID]
[Department/Designation, if applicable]