Introduction

Privilege leave is a type of leave that is provided to employees in addition to their regular leave entitlement. It is a form of paid leave that is granted to employees for special occasions such as weddings, religious holidays, and other important events. Privilege leave is also known as special leave or discretionary leave. It is a benefit that is provided to employees to help them balance their work and personal life. This article will discuss the meaning of privilege leave, the rules and regulations associated with it, and how to calculate it.

What is Privilege Leave | Meaning, Rules & Calculation

Privilege leave is a type of paid leave that is granted to employees in addition to their regular leave entitlement. It is usually granted to employees who have completed a certain number of years of service with an organization. The purpose of privilege leave is to reward employees for their loyalty and dedication to the organization.

Rules:

1. Privilege leave is usually granted to employees who have completed a certain number of years of service with an organization.

2. The amount of privilege leave granted to an employee is usually based on the number of years of service.

3. Privilege leave is usually taken in addition to the regular leave entitlement.

4. Privilege leave is usually taken for a specific purpose, such as a vacation or a special event.

5. Privilege leave is usually not transferable to another employee.

Calculation:

The amount of privilege leave granted to an employee is usually calculated based on the number of years of service. For example, an employee who has completed 5 years of service may be granted 5 days of privilege leave.
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Privilege leave (PL) means earned leaves (EL) given for the service of the employee every year. These leaves can be applied when employees want long leave for vacation, marriage, etc… Privilege leaves can be converted into cash when leaving the job (or) can be carried forward to next year, if the employee continues the job.

The number of privilege leaves (earned leaves) given by the company depends on the “state in which they are operating their business” and also the “act applicable to that business”.

Nowadays most companies are covered under the shops and commercial establishment act, every state has its own shops and establishment act.

How Many Privilege Leaves Per Year

If your company is covered under the shops and commercial establishment act then the number of privilege leaves depends on your state’s respective shops and establishments act.

In most cases, companies will grant 15-20 days of privilege leaves per year and you should apply for the leave before 7-15 days of taking the leave.

No of Privilege Leaves Per Year

S No	State	EligibleAfter	No. of Privilege Leaves	Maximum Privilege leaves Accumulated	Leave intimation
1	Andhra Pradesh	After 240 days of continuous service	15	60	7 days before taking leave
2	Assam	After 12 months of continuous service	1 leave for every 20 days of work.	45	15 days before taking leave
3	Bihar	After 240 days of continuous service	16	30	–
4	Chhattisgarh	After 12 months of continuous service	30	90	–
5	Gujarath	After 240 days of continuous service	21	63	–
6	Himachal Pradesh	After 20 days of continuous service	1 leave for every 20 working days	40	–
7	Jammu & Kashmir	After 12 months of continuous service	30	90	–
8	Jharkhand	After 240 days of continuous service	1 leave for every 20 working days	–	15 days before taking leave
9	Karnataka	After 12 months of continuous service	1 leave for every 20 working days	30	10 days before taking leave
10	Kerala	After 12 months of of continuous service	12	24	–
11	Madhya Pradesh	After 12 months of continuous service	14	90	–
12	Maharashtra	After 240 days of continuous service	21	42	–
13	Meghalaya	After 12 months of continuous service	16	30	–
14
15	Nagaland	After 12 months of continuous service	16	30	7 days before taking leave
16	Odisha	After 240 days of continuous service	1 leave for every 20 days of work (Holidays should not be included)	30	–
17	Punjab	After 20 days of continuous service	1 leave for every 20 days of work (Holidays should not be included)	40	–
18	Rajasthan	After 240 days of continuous service	1 leave for every 12 days of continuous service	30	7 days before taking leave
19	Tamil Nadu	After 12 months of continuous service	12	24	–
20	Telangana	After 240 days of continuous service	15	60	7 days before taking leave
21	Tripura	After 12 months of continuous service	15	56	–
22	Uttar Pradesh	After 12 months of continuous service	15	45
23	Uttarakhand	After 240 days of continuous service	1 leave for every 20 days of work (Holidays should not be included)	45
24	West Bengal	After 12 months of continuous service	14	28

Privilege Leaves As per Factories Act 1948

(Factory means the premises where the manufacturing works take place with or without the aid of power.)

If your company comes under the factories act 1948 then you will become eligible for privilege leaves after 240 working days of continuous service in a calendar year (1 Jan to 31 Dec). For every 20 working days (excluding holidays) you will get 1 privilege leave.

The maximum unused privilege leaves can be accumulated is 30 days.

Privilege Leave Encashment

Most companies calculate leave encashment on basic wage + DA, companies can pay even on gross salary as well, it is their own choice. (But there is no certain rule in the factories act or shops & establishment act to calculate leave encashment on basic wage or gross wage)

Privilege leave encashment calculation formula:

(Basic salary + Dearness Allowances/26) X No.of Privilege Leaves.

Note: If there is no DA in your company then ignore it in the calculation.

Privilege Leave Encashment Calculation Example:

If a person has 60 accumulated privilege leaves, and his last 10 months’ basic wage + DA is 30,000 Rs, then the leave encashment will be calculated as follows:

(30000/26)*60 = 69,230 RS

Therefore that person will get a privilege leave encashment amount of 69,230 Rs.

Reason to Apply for the Privilege Leave

Long vacation (or) recreation activities.
Marriage of self (or) family members.
Health-related issues of self or family members.
To prepare for exams.
In case of any emergency etc.

But make sure that your reason to apply for privilege should be professional and agreeable, don’t apply them just for the sake of it, use them whenever you really need them, otherwise carry forward them or you will be paid as cash.

FAQS

When should I take a leave?

Whenever you want to take a planned leave for more than 5 days then you can apply for privilege leaves with prior intimation.

What is the difference between privilege leave and casual leave?

Casual leaves can be taken on an urgent basis for half-day to 2 days whereas privilege leave can be taken for more than 5 days.

What if I leave my job even before completing the eligibility period?

Companies will pay the amount for your earned privilege leaves, you will get that amount with your full and final settlement. For example, if you are granted only 5 Privilege leaves then the company will pay full salary for those 5 PLs during the F&F settlement.

Can privilege leave be denied?

As an employee you should take with approval only, If your employer is not approving your privilege leave request without any valid reason then you can proceed legally.

What is the full form of PL leave?

PL leave means privilege leave, it is also called earned leaves or annual leaves.

Will Privilege leave / earned leaves lapse?

Yes, if the limit of the accumulated earned leaves crosses the maximum limit set by your state’s shops and establishment act then they will lapse. So it is better to use them before crossing the maximum accumulation limit.

But every company has its own policy when it comes to lapsing the earned leaves, some companies lapse them, and some do not. So before making a decision to use them or leave them, it is better to contact your HR department.

How much tax should I pay on leave encashment of PLs?

It depends on Two cases,

i) if you want to encash your leaves before your retirement then the leave encashment is taxable for both govt and private sector employees, it will be considered as your salary.

ii) During retirement leave encashment is tax-free for govt employees. (Both state & central).

And for private-sector employees, they can get tax exemption up to 3,00,000 Rs (or) actual leave encashment amount (or) last 10 months basic salary + DA (or) cash equals to the no. of privilege leaves he/she gets every year. (whichever the amount is lower it will be considered for tax exemption).

What is the meaning of advance privilege leave?

Some companies give advance privilege leaves to the employees in some emergency cases. Advance privilege leaves should be given to the most trustworthy employees in the company and they should not exceed the actual limit in that particular year.

Also Read

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What is Privilege Leave?

Privilege leave is a type of paid leave that is granted to employees in certain countries. It is usually granted to employees who have worked for a certain period of time or have achieved a certain level of seniority. It is also known as annual leave, vacation leave, or paid leave. The purpose of privilege leave is to give employees a break from their work and to allow them to enjoy leisure activities or to take care of personal matters.

Meaning of Privilege Leave

Rules for Privilege Leave

The rules for privilege leave vary from country to country. Generally, it is granted to employees who have worked for a certain period of time or have achieved a certain level of seniority. It is also known as annual leave, vacation leave, or paid leave. The amount of privilege leave granted to an employee depends on the country and the company’s policy. In some countries, privilege leave is granted on a yearly basis, while in others it is granted on a monthly basis.

Calculation of Privilege Leave

The calculation of privilege leave depends on the country and the company’s policy. Generally, it is calculated based on the number of days worked or the number of years worked. For example, in some countries, privilege leave is calculated based on the number of days worked in a year, while in others it is calculated based on the number of years worked. The amount of privilege leave granted to an employee also depends on the country and the company’s policy.

Introduction