A paid day off earned for working on a weekend, public holiday, or beyond regular hours, usually claimable within 30-90 days. Where a policy allows comp-off encashment, unused credits are paid out at one day of (Basic + DA) each.

Compensatory Off (Comp-Off)

A paid day off earned for working on a weekend, public holiday, or beyond regular hours, usually claimable within 30-90 days. Where a policy allows comp-off encashment, unused credits are paid out at one day of (Basic + DA) each.

What is Compensatory Off (Comp-Off)?

Comp-Off is the leave you earn when the company asks you to work on a non-working day, a Sunday release, a Saturday client demo, or a public holiday like Republic Day. Instead of paying overtime cash, the employer credits one paid day off that you can take later. Most policies require pre-approval before the extra workday and a written request to convert it into Comp-Off. There's usually an expiry window of 30, 60, or 90 days, after which the credit lapses. Comp-off encashment is the payout an employee receives for unused comp-off credits instead of letting them lapse. It is not automatic: Comp-Off isn't encashable by default, but a growing number of employers now allow comp-off encashment, paying one day of wages for each unused comp-off day, usually at exit or when the credit is about to expire. Some policies offer conversion to earned leave instead of a cash payout. How comp-off encashment is calculated: encashment, when offered, is paid on (Basic + DA) rather than gross, with the per-day rate taken as (Basic + DA) divided by 26. So three unused days on a (Basic + DA) of Rs 52,000 work out to (52,000 / 26) x 3 = Rs 6,000. Tax treatment: comp-off encashment is taxable as salary in the year it is paid, with no special exemption like the one earned-leave encashment gets under Section 10(10AA). It is added to gross salary and taxed at the employee's slab rate. Comp-Off rules vary by state Shops & Establishment Act, and some states mandate a paid day off if an employee works on a weekly off. Comp-Off shouldn't be confused with overtime pay, which is governed separately under the Factories Act.

Formula: Comp-off encashment = Unused comp-off days x (Basic + DA) / 26

Example

Rahul earns 1 comp-off for a Sunday deployment (use within 60 days). Separately, Priya exits with 3 unused comp-off days; her policy encashes them on (Basic + DA) of Rs 52,000 -> per-day 52,000 / 26 = Rs 2,000, so she is paid 3 x Rs 2,000 = Rs 6,000, taxed as salary.

How Compensatory Off (Comp-Off) is used

Engineering, IT support, and operations teams use Comp-Off heavily for weekend deployments and on-call rotations. HR tracks expiry dates to prevent forgotten credits.

Compensatory Off (Comp-Off) FAQs

How is comp-off encashment calculated?

Where a policy allows it, comp-off encashment = unused comp-off days x one day of (Basic + DA), with the per-day rate usually taken as (Basic + DA) / 26. It is typically paid at exit or when the credit is about to lapse.

Is comp-off encashment taxable?

Yes. Comp-off encashment is taxed as salary income in the year it is paid. Unlike earned-leave encashment, it has no special exemption under Section 10(10AA).

Can I encash unused comp-off?

By default many policies just let the credit lapse, but more companies now allow comp-off encashment or conversion to earned leave. Check your leave policy for the exact rule and rate.

How long do I have to use comp-off?

Typical expiry is 30 to 90 days from the date earned. After that the credit lapses unless your policy allows encashment.

Is comp-off the same as overtime pay?

No. Comp-Off is a paid day off in exchange for extra work. Overtime is cash payment at 2x the regular hourly rate, applicable mainly under the Factories Act.