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Steps to Calculate Leave Encashment (using Average Daily Wage)
Steps to Calculate Leave Encashment (using Average Daily Wage)

Calculating unused annual leaves for resigned employees to include in last day pay. Average Daily Wage (ADW)

Nicholas avatar
Written by Nicholas
Updated over a week ago

If your company practises leave encashment (calculating unused leaves for resigned employees), it is not automatically calculated in Talenox.ย 

To calculate leave encashment using Average Daily Wage (ADW), you can use our Average Daily Wage (ADW) auto compute under Hourly/Daily Attendance tab. Here's a quick step-by-step guide:ย 

Step 1: Head to Payroll > Payroll Settings > Process Payment - Step 2 > Hourly/Daily Attendance tab.ย 

Step 2: To check ADW, just select Average Daily Wage from the drop-down list. Here, you will find his Rate of Pay calculated for 1 day.ย 

Step 3: Thereafter, add 1 day to encash in the No. of Hours or Days field. The Amount field will be auto-populated with the final calculated figure. You can see the sample screenshot below (for reference only):

Step 4:
Under Ad Hoc Payment/Deduction tab, take the Amount from Step 1 as "Leave Pay" pay item.

Step 5: Remember to delete the calculation in Step 3 and revert to Regular Hours before processing payroll. ๐Ÿ˜€

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