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Step-wise Leave Encashment

Hi Friends,

I want to share the topic of Leave Encashment

1. Quota Compensation types

Table no. V_T556U

Create Sub-types for Quota compensation types (IT 0416)


2. Create Wage Type Catalog

Table no. OH11

Create New WT, copy of std wt MLE0


3. Check Wage Type Group ‘Time Quota Compensation’

Table no. VV_52D7_B_0416_AL0


4. Check Wage Type Text

Table no. V_512W_T


5. Check Permissibility of Entries for Each Infotype

Table no. V_T512Z


6. Check Wage Type Characteristics

Table no. V_T511


Table no. V_512W_D

6 1.JPG

7. Assign Wage Types to the Quotas to be Compensated

Table no. V_T556W


8. Valuation Bases

Table no. V_512W_B


*If we are writing PCR no need to configure this table.

9. Add New Wage type in Remuneration Form PE51

T-code – PE51

Add New WT in the Form in Earnings side and in the Window 1 also


10. PCR (PE02)

According to rule, leave encashment is calculated on Basic and DA only

Taken only Basic and DA


11. SCHEMA (PE01)

Copy std schema XT00 to ZT00

Insert PCR after Function P0416


pe01 1.JPG

12. IT 0416

PL Encashment for 1 day.




Go though the below Document for Leave encashment through Off-cycle payroll run

Leave Encashment through Off-Cycle Payroll

Thanks and Best Regards,

Praneeth Kumar

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        • Hi

          In my last two implementation client is asking for the payment of leave encashment in Off-cycle for the existing emp. In regular salary they are getting the amount automatically but in off-cycle its not working. I asked user to maintain it manually in it267.

          Is it possible to fetch the amount automatically in off-cycle.


          • Hi Santosh,

            i got your requirement. in regular payroll it is clearly stated that Emp. is resigned and LE is updating for the payments. if you want it through Off-cycle automatically how system will know that employee is resigned ? as per my knowledge, they have to do manual entries in the IT 0267.

            Let see if any experienced consultants will give any suggestion regarding your req.

            And as per your requirement, i will post that document also LE through Off-cycle.

  • Great Document Praneeth.

    🙂 🙂 🙂

    Thanks for your document . I will post the leave encashment in the same thread through valuation basis which iam facing an error

    Thanks again for your document

  • It should calculate on Basic Pay Divided by number of working days For example Basic Pay is  10,000 If an employee encash 1 leave he will be receiving Rs 333 for one leave Similarly if he encash two leaves He will be receiving Rs 666

    Please go through attachment.  Once Iam done with that I will try another Scenario. This is Basic Scenario which I would like to try first.

















  • Hi Praneeth,

    In the first step you created two quota types that is 0416 and and PSPL

    In 0416 I can see a rule 211 but in my system its not allowing nor i dont see any rule 211

    Please let me know how do i create a rule for that  

    • Hi,

      You have to assign Leave Deduction rule or Leave quota type either one you have to assign for the compensation type.

        • This deduction rule is nothing but the deduction rule which you have assigned in the counting rule for you PL quota.



          • Hi priya,

            i think you didn’t understand the leave encashment concept.

            If Employee want to En-cash the leaves what he is having, he has a facility of en-cash  those leaves. it is based on the company policy also. as per the government rules leave en-cashment is for PL & CL only.

  • Hi Praneeth,

    Nice document At clients place  We dont have time management module we have Negative time Management without absences ( Without Leave Configuration) we just have till planned working time configuration in Time Management and Complete Payroll. So in that case there is no PL Configuration.

    In case if  No of leaves to be compensated For example If we have 2 leaves to be paid It should calculate on basic pay + personal allowance   These leaves to entered in custom  info type that should calculate and show on payslip Since we dont have time management complete configuration Do you think this is the right approach How can we go ahead and do the configurations?

  • Hi Praneeth,

    Thank you so so much.. started to learn payroll.. learning a lot by seeing documents like your’s

    thanks for sharing.. this would be great..

    Please give us more documents for the beginners for payroll which would be helpful for us to go through.