Prerequisites
Before you can encash an employee's leave balance in FNF:
The employee must already be offboarded and have a termination payroll created.
The employee must be assigned to at least one leave policy that is marked as encashable with an available balance greater than zero.
Leave encashment formulas must be configured for your company.
Only Admins (with the Super Admin or Company Admin role) can access this feature. Tenant HR Admins do not have access to termination leave encashment.
Step 1 - Navigate to the FNF Adjustment Page
Navigate to the employee's termination payroll adjustment page using either of the two paths below.
Option A — Via the Payroll menu:
Click on Payroll in the left navigation bar.
Select Termination Payroll.
Locate the employee's payrun in the list and click Process to open the FNF adjustment page.
Option B — Via the Employee's Offboarding tab:
Click on People in the left navigation bar and select Employees.
Click on the name of the offboarded employee.
Navigate to the Offboarding tab on their profile.
Scroll down to the Termination payroll section and click Process on their payrun.
Step 2 - Open the Leave Encashment Sync Panel
On the FNF adjustment page, locate the Leave encashment amount field under the retiral components section.
The field will show ₹0 if no encashment has been synced yet.
Click the Sync button next to the Leave encashment amount field.
This opens the Encash Leaves drawer, which walks you through a 3-step process.
Step 3 - Select Encashable Leave Policies (Step 1 of 3)
The drawer opens on the Select Policies step, displaying a table of the employee's eligible encashable leave policies along with their current available balance.
Review the listed policies. You can click the eye icon next to any policy to view a detailed breakdown of that employee's leave balance timeline and calculations.
Use the checkboxes to select the policies you want to encash.
Click Set Balances to proceed to the next step.
Note: Only leave policies that are configured as encashable and have a balance greater than zero will appear in this list.
Step 4 - Set Encashable Days and Payment Formula (Step 2 of 3)
In the Set Balances step, configure the encashment details for each selected policy.
For each policy in the table:
Encashable (Y): Enter the number of leave days to encash. This value cannot exceed the employee's available balance for that policy.
Payment per day: Select the formula to use for calculating the per-day payment amount (e.g., based on basic salary, gross salary, etc.).
Tip: If you want to apply the same number of encashable days or the same formula across all policies at once, click the Bulk Set Same Value button at the top right of the table.
Once all values are set, click Summary to calculate the encashment amounts and proceed to the preview.
Step 5 - Review Summary and Sync (Step 3 of 3)
The Summary step shows a preview of the calculated leave encashment for each selected policy, including:
Policy Name
Encashable Days
Payment per day formula
Encashed Amount
A Total row showing the combined encashment amount
You can download this summary as a CSV file for your records by clicking the download icon at the top right.
Important: Review the summary carefully. An information note at the bottom of the screen confirms: "All the encashed leaves will be deducted when the leave encashment is synced." This means the employee's leave balance will be reduced immediately upon syncing.
Once you are satisfied with the summary, click Sync to confirm. The drawer will close automatically.
Step 6 - Verify the Leave Encashment Amount
After syncing, the Leave encashment amount field on the FNF adjustment page will update to show the total encashment amount with a Synced status chip.
Click the View button next to the amount to see a detailed breakdown of the calculation by policy.
The employee's leave balances will have been automatically reduced by the encashed days. You can verify this under Leave > Balances.
The encashment amount is now included as a component in the employee's FNF payslip.
You may now continue with the rest of the termination payroll process — reviewing and finalizing the payroll to generate the FNF payslip.
Additional Information
Manually Overriding the Leave Encashment Amount
If you need to change the leave encashment amount after a sync has already been completed, you can manually override the value:
Click the pencil (edit) icon next to the Leave encashment amount field.
In the Input Amount dialog, enter the new Leave Encashment Amount (must differ from the current value).
Enter a Comment explaining the reason for the change (mandatory).
Click Save.
After a manual override, the status chip next to the field will change from Synced to Filled.
What Happens to the Leave Balance?
When you sync leave encashment, the encashed days are deducted from the employee's leave balance immediately. Use the manual override option if you need to adjust the payable amount after syncing.
Who Can Use This Feature?
This feature is available to Super Admins and Company Admins. Tenant HR Admins are not permitted to access the termination leave encashment APIs and will see an authorization error if they attempt to do so.