Annual Leave Encashment Calculator Singapore 2026
Calculate your unused annual leave payout when resigning or upon contract end — free calculator with real-time results in SGD.
💰 Annual Leave Encashment Calculator
Based on MOM Employment Act rules. For illustrative purposes only.
Understanding Annual Leave Encashment in Singapore
Annual leave encashment is a statutory entitlement under Singapore’s Employment Act (Cap. 91A), administered by the Ministry of Manpower (MOM). When an employee leaves a job with unused earned leave — whether through resignation, termination, or contract expiry — the employer is legally required to pay out the monetary equivalent of those days. As at Q1 2026, the MOM formula divides your monthly basic salary by 26 working days (the standard monthly working day count) to arrive at your daily rate, then multiplies by the number of unconsumed leave days.
This calculator is for educational reference only. It does not constitute legal or employment advice. If you have a dispute with your employer over leave entitlements, contact MOM’s Employment Standards Branch or the Tripartite Alliance for Dispute Management (TADM).
Who Is Covered Under the Employment Act?
Employees earning up to S$4,500/month in basic salary — and most workmen regardless of salary — are covered by Part IV of the Employment Act, which prescribes minimum annual leave of 7 days (rising to 14 days by the 8th year of service). Employees above S$4,500/month may have their leave entitlement governed by their employment contract rather than the Act’s minimums, but the encashment obligation remains. Notably, self-employed persons, domestic workers, and seafarers operate under separate regimes.
What Counts as “Unused” Leave?
Unused annual leave is the balance of your earned leave entitlement that you have not taken by the time your employment ends. If you resign mid-year, your entitlement is typically pro-rated based on months of service in that leave year. For example, if you are entitled to 14 days per year and leave after 6 months, your pro-rated entitlement is approximately 7 days. Any leave taken in excess of this pro-rated amount may be deducted from your final pay under some employment contracts — always check your contract and company leave policy carefully.
How to Use This Annual Leave Encashment Calculator
- Enter your monthly basic salary: Use your basic salary only — do not include allowances, bonuses, or overtime. The MOM formula for leave encashment is based on basic salary.
- Set your unused annual leave days: Drag the slider to the number of unconsumed leave days you have at the time of leaving. If you are still calculating your pro-rata entitlement, use the field below to enter your full-year entitlement and compute your balance manually.
- Select working days per month: MOM’s default is 26 days. Some employers use 22 (5-day week x 4.3 weeks). Check your employment contract if unsure.
- Enter notice period served (if applicable): If you served your notice period, this is typically paid as regular salary rather than encashment — but the daily rate calculation is the same. Enter 0 if your notice is salary-in-lieu.
- Enter your accrued leave entitlement: This field helps you track your pro-rated entitlement if you are leaving mid-year. Compare it to your used leave to confirm your unused balance.
The calculator instantly shows your daily rate, leave encashment amount, notice pay, and total payout in SGD. Combine this with our Retirement Planning Calculator to see how a job transition affects your long-term financial plan.
Pro tip: If you have both unused leave and are considering investing your encashment payout, use our DCA Investment Calculator to model how that lump sum could grow over time.
Contents — Click to Expand
- What Is Annual Leave Encashment in Singapore?
- How the MOM Formula Works: The Maths Behind Leave Pay
- Leave Encashment vs Salary-in-Lieu of Notice in Singapore
- Is Annual Leave Encashment Taxable and Subject to CPF?
- MOM Leave Entitlement Rules: What Every Singapore Employee Should Know
- How to Invest Your Leave Encashment Payout for Passive Income
- Frequently Asked Questions
What Is Annual Leave Encashment in Singapore?
Annual leave encashment is the conversion of unused, earned annual leave into a cash payout when an employment relationship ends. Under Section 91 of Singapore’s Employment Act, employers must pay employees for any unused leave accrued during the current leave year at the point of termination or resignation. This is not a discretionary benefit — it is a legal obligation for employees who fall within the Act’s coverage.
The key principle is that earned leave is deferred compensation. If your employer approved your annual leave entitlement as a contractual right and you did not use it, that value belongs to you. Singapore’s MOM has consistently upheld this principle in employment dispute rulings. As at Q1 2026, the median annual leave entitlement for full-time employees in Singapore is 14 days per year after 3 years of service, rising to 18+ days for senior employees in professional roles.
Leave encashment is distinct from “leave forfeiture” — some employment contracts specify that leave not taken by a certain date (e.g., 31 March) is forfeited. However, MOM regulations generally prohibit forfeiture of leave earned during the year of departure. If your company has a “use it or lose it” policy, that typically applies to carry-forward leave from prior years, not the current accrual.
Common scenarios where leave encashment applies: resignation with notice served, resignation with salary-in-lieu of notice, retrenchment, contract expiry, and mutual separation agreements. In all cases, the encashment payout should appear in your final salary payment, which must be issued within 3 working days of termination under MOM rules.
How the MOM Formula Works: The Maths Behind Leave Pay
The MOM-prescribed formula for annual leave encashment pay is straightforward:
Daily Rate = Monthly Basic Salary / 26
Leave Encashment = Daily Rate x Number of Unused Leave Days
The divisor of 26 represents the standard number of working days in a month under MOM guidelines. If your contract specifies a different divisor, use that instead.
Example: A Singapore employee earning S$5,200/month basic salary with 10 days of unused leave would receive:
Daily Rate = S$5,200 / 26 = S$200/day
Leave Encashment = S$200 x 10 = S$2,000
Note that “basic salary” excludes: bonuses, commissions, overtime pay, allowances (transport, meals, etc.), and other variable components. Only the fixed monthly basic applies. If you are paid a gross salary with all components bundled, check your employment letter for the breakdown.
For employees who leave mid-year, the pro-rated entitlement applies. Using the same employee above: if they leave after 9 months of a 12-month leave year with 14 days full-year entitlement, the pro-rated entitlement is 14 x (9/12) = 10.5 days. If they have taken 6 days already, the unused balance for encashment is 4.5 days = S$900.
| Monthly Salary | Daily Rate (26) | 5 Days Unused | 10 Days Unused | 14 Days Unused |
|---|---|---|---|---|
| S$2,500 | S$96.15 | S$480.77 | S$961.54 | S$1,346.15 |
| S$4,000 | S$153.85 | S$769.23 | S$1,538.46 | S$2,153.85 |
| S$6,000 | S$230.77 | S$1,153.85 | S$2,307.69 | S$3,230.77 |
| S$8,000 | S$307.69 | S$1,538.46 | S$3,076.92 | S$4,307.69 |
| S$10,000 | S$384.62 | S$1,923.08 | S$3,846.15 | S$5,384.62 |
Leave Encashment vs Salary-in-Lieu of Notice in Singapore
These are two separate payouts that often appear together in a final payment but serve different purposes. Understanding the distinction matters for CPF and tax treatment.
Annual Leave Encashment is the payment for unused earned leave. It uses the basic salary daily rate formula above. It is taxable as employment income, and CPF contributions are payable on it because it is considered part of your wages.
Salary-in-Lieu of Notice (also called notice pay) is the payment made when either the employer or employee elects not to serve the notice period. The formula is also based on the daily basic rate x notice days.
| Item | Formula | CPF Applicable? | Taxable? |
|---|---|---|---|
| Leave Encashment | Basic / 26 x days | Yes | Yes |
| Salary-in-lieu of notice | Basic / 26 x notice days | Yes | Yes |
| Retrenchment benefit | Negotiated (typically 1-2 mths/yr) | No | No (ex-gratia) |
| Gratuity / Long-service award | Per contract | No | Yes (income) |
Is Annual Leave Encashment Taxable and Subject to CPF?
Yes to both, for most employees. The Inland Revenue Authority of Singapore (IRAS) classifies annual leave encashment as employment income, which means it is assessable for personal income tax in the year it is received. You will see it on your IR8A form, and it should be reported in your annual income tax return. If your total employment income falls below S$22,000, you are not required to file a return, but you should still ensure the amount is captured correctly.
CPF contributions are also applicable on leave encashment pay. For employees below 55 earning above the CPF wage ceiling (S$8,000 per month ordinary wage from Jan 2026), the CPF contribution applies on the encashment amount up to the additional wage ceiling. Use our CPF Contribution Calculator to estimate the CPF deduction on your payout.
Most employees leaving jobs mid-year will have CPF deducted from their encashment pay as part of the final payroll run. Check with your HR or payroll team on the exact computation.
MOM Leave Entitlement Rules: What Every Singapore Employee Should Know
Singapore’s Employment Act prescribes a minimum annual leave schedule based on years of service with the same employer. As at Q1 2026:
| Years of Service | Minimum Annual Leave (days) |
|---|---|
| 1st year | 7 days |
| 2nd year | 8 days |
| 3rd year | 9 days |
| 4th year | 10 days |
| 5th year | 11 days |
| 6th year | 12 days |
| 7th year | 13 days |
| 8th year and beyond | 14 days |
These are minimums. Many Singapore employers — especially in finance, tech, and professional services — offer 18-21 days from year 1, and some offer up to 25 days for senior hires. Your actual entitlement is the higher of the Employment Act minimum and your contractual entitlement.
For leave eligibility, you must have worked at least 3 months with the same employer to qualify for paid leave. If you leave before completing 3 months, no leave encashment is payable. After 3 months, leave is typically earned on a monthly pro-rata basis throughout the year.
Under the Employment Act, an employer may also direct an employee to use any accumulated leave during the notice period. If your employer insists on this and you have 10 days of leave during a 1-month notice, you would only be encashed for any remaining days after the leave-during-notice period.
How to Invest Your Leave Encashment Payout for Passive Income
A leave encashment payout — often S$1,000 to S$5,000 for a typical Singapore professional — represents seed capital that, if invested wisely, can compound meaningfully over a retirement horizon. Rather than letting it sit in a savings account earning 0.05%, consider deploying it into dividend-generating assets.
For Singapore investors, S-REITs remain one of the most accessible passive income vehicles. With the Best S-REITs in Singapore currently yielding 6-9%, a S$3,000 encashment invested in a broadly diversified S-REIT portfolio could generate S$180-S$270 in annual passive income. Use our Dividend Portfolio Yield Calculator to model this.
If you prefer a hands-off approach, robo-advisors like Endowus and Syfe allow you to deploy as little as S$1,000 into diversified income portfolios. Both offer CPF OA and SRS compatibility for eligible assets. Start with our Retirement Planning Calculator to see how a regular contribution — starting with your encashment payout — builds over time.
For the risk-averse, Singapore Savings Bonds (SSBs) and T-bills are safe, government-backed options for parking shorter-term cash. Use our T-Bill, SSB and FD Comparison Calculator to compare current rates across these options.
Frequently Asked Questions
How is annual leave encashment calculated in Singapore?
Under MOM’s Employment Act rules, the formula is: Monthly Basic Salary / 26 x Number of Unused Leave Days. For example, if you earn S$5,000/month and have 8 unused days, your encashment is S$5,000 / 26 x 8 = S$1,538.46. Only basic salary counts — bonuses, allowances, and overtime are excluded.
Is annual leave encashment in Singapore taxable?
Yes, annual leave encashment is fully taxable as employment income in Singapore. It will appear on your IR8A form and should be declared in your income tax return for the year of receipt. CPF contributions (both employee and employer) are also applicable on leave encashment pay for most employees under the ordinary and additional wage rules.
Is my employer obligated to pay out unused annual leave in Singapore?
Yes, for employees covered by the Employment Act (generally those earning up to S$4,500/month in basic salary, plus most workmen). Employers must pay out earned, unused leave upon termination of employment. If your employer refuses, you can file a dispute with MOM’s Employment Standards Branch or TADM. Employers have up to 3 working days after termination to make the final payment.
What is the difference between leave encashment and salary-in-lieu of notice in Singapore?
Leave encashment is payment for unused earned annual leave days. Salary-in-lieu of notice is payment given when a party (employer or employee) elects to pay rather than serve the notice period. Both use the same daily rate formula (basic salary / 26), but they are separate payouts. CPF and income tax apply to both. Retrenchment benefits, by contrast, are generally tax-exempt and CPF-free as they are classified as ex-gratia payments.
How much annual leave am I entitled to in Singapore?
Under the Employment Act, the minimum starts at 7 days for your first year of service, increasing by 1 day per year up to a maximum of 14 days from year 8 onwards. Many Singapore employers offer more — 14-21 days from day one is common in professional roles. Your actual entitlement is the higher of the statutory minimum and what your employment contract specifies.
Can my employer forfeit my unused annual leave when I resign?
For leave earned in the current leave year, MOM generally prohibits outright forfeiture upon resignation — it must be encashed. However, some companies’ leave policies specify that carry-forward leave from prior years (if not taken by a cut-off date like 31 March) can be forfeited. Always check your employment contract and company HR policy. If in doubt, raise it in writing with HR before your last day and file with TADM if disputed.
Does annual leave encashment apply to part-time employees in Singapore?
Yes, part-time employees covered by the Employment Act are entitled to pro-rated annual leave based on their hours worked relative to a full-time employee (typically 44 hours per week). The encashment formula uses their actual basic salary. Part-time employees who work at least 35 hours per week are generally treated as full-time for leave purposes. Those working fewer hours receive proportionally reduced entitlements.
How do I invest my annual leave encashment payout in Singapore?
Common options include S-REITs (yielding 6-9% p.a. as at 2026), robo-advisors like Endowus or Syfe Income+ (targeting 5-6% p.a.), Singapore Savings Bonds (SSBs) for capital-safe returns, or T-bills for short-term parking. For amounts S$1,000-S$5,000, a robo-advisor or a single lot of a S-REIT ETF like the Lion-Phillip S-REIT ETF (CLR) is a low-friction option. Use our DCA Investment Calculator to model the growth of a one-time lump sum.
What should I do if my employer does not pay my leave encashment?
First, raise the issue in writing with your HR or payroll department, citing MOM’s Employment Act obligations. If unresolved within a few days, file a salary claim with MOM’s Employment Claims Tribunals (ECT) via the Tripartite Alliance for Dispute Management (TADM) portal. Claims must typically be filed within 1 year of the dispute. There is no fee for claims below S$20,000 for Employment Act-covered employees.
Put Your Leave Payout to Work
Now that you know your encashment amount, make that money grow. Use our free Singapore financial tools and referral bonuses to kickstart your passive income journey.