diff --git a/erpnext/hr/doctype/leave_encashment/leave_encashment.py b/erpnext/hr/doctype/leave_encashment/leave_encashment.py
index 1e2c3b9..25db392 100644
--- a/erpnext/hr/doctype/leave_encashment/leave_encashment.py
+++ b/erpnext/hr/doctype/leave_encashment/leave_encashment.py
@@ -26,15 +26,25 @@
 	def on_submit(self):
 		if not self.leave_allocation:
 			self.leave_allocation = self.get_leave_allocation()
-
-		#ToDo: Create Additional Salary Component
+		additional_component = frappe.new_doc({"doctype": "Additional Salary Component",
+									"company": frappe.get_value("Employee", self.employee, "company"),
+									"employee": self.employee,
+									"salary_component": frappe.get_value("Leave Type", self.leave_type, "earning_component"),
+									"from_date": self.encashment_date,
+									"to_date": self.encashment_date,
+									"amount": self.encashment_amount,
+									"docstatus": 1
+								}).insert()
+		self.set_value("additional_component", additional_component.name)
 
 		# Set encashed leaves in Allocation
 		frappe.db.set_value("Leave Allocation", self.leave_allocation, "total_leaves_encashed",
 				frappe.db.get_value('Leave Allocation', self.leave_allocation, 'total_leaves_encashed') + self.encashable_days)
 
 	def on_cancel(self):
-		# ToDo: Cancel Additional Salary Component
+		if self.additional_component:
+			frappe.get_doc("Additional Salary Component", self.additional_component).cancel()
+
 		if self.leave_allocation:
 			frappe.db.set_value("Leave Allocation", self.leave_allocation, "total_leaves_encashed",
 				frappe.db.get_value('Leave Allocation', self.leave_allocation, 'total_leaves_encashed') - self.encashable_days)