Overview & Regulatory Framework

Leave Preparatory to Retirement (LPR), commonly referred to as 'leave encashment', is a significant financial benefit provided to civil servants under the Revised Leave Rules of 1981. Governed by the Finance Division and the Establishment Division, this benefit allows employees to receive a lump-sum payment equivalent to their last drawn basic pay upon retirement instead of availing the 365 days of leave.

As per the latest updates, the policy allows for the encashment of up to 365 days of leave (subject to the total accumulated leave balance). This is a statutory right for government servants and does not require special approval beyond the standard retirement notification. For precise calculations, utilize our Pension Calculator to estimate your post-retirement finances.

Official Rate Slabs / Schedule

Eligibility Criteria & Qualifying Conditions

• Service Status: Permanent government servants only.
• Leave Balance: The employee must have a leave balance of at least 365 days in their service record.
• Retirement Type: Applicable to superannuation, voluntary retirement, or medical invalidation.
• Excluded Categories: Contract employees and those dismissed or removed from service are not eligible.

Step-by-Step Claim or Application Process

1. Verify your leave balance with your respective DDO (Drawing and Disbursing Officer).
2. Submit a formal application requesting leave encashment along with your retirement notice.
3. The office will issue an 'Encashment Order' confirming the number of days to be paid.
4. The bill is forwarded to the AGPR or District Accounts Office for processing.
5. The amount is credited directly to your salary account along with your final gratuity/pension settlement.

Required Documents & Attestation Checklist

• Last Pay Certificate (LPC).
• Original Service Book showing the updated leave account.
• Departmental Clearance Certificate (No Demand Certificate).
• CNIC copy attested by a gazetted officer.

Frequently Asked Questions (FAQ)

What is the formula for calculating encashment?

The formula is: (Last Basic Pay) x (Number of accumulated leave days up to 365).

Is this benefit taxable?

Under current FBR rules, leave encashment upon retirement is generally exempt from income tax for government employees.

Can I avail 365 days of leave and still get encashment?

No, you must choose between either availing the leave or encashing it; both cannot be claimed simultaneously.