Calculate annual leaves based on contract year

Many organizations face a challenge in managing their employees' annual leave, as their leave calculation policy is based on each employee's contract year, rather than the traditional calendar year.

To overcome this problem, a solution was developed that focuses on making the "balance start date" available to each individual employee. By default, all new employees start on January 1 of the current year, but administrators can modify this date individually or collectively using a bulk upload file. They can also choose to start calculating annual leave based on the joining date.

Goal: Let organisations reset annual-leave balances on the employee Contract Year (hire date or override) in addition to the existing Calendar Year option, with minimal admin effort.

Steps to change the calculation method for annual leave to be based on the contract:

1. Go to Attendance & Leave

2. Select "Leave Balance"

3. Then select the "Leave Balance" tab

4. Select "Actions" about "Annual balance starts"

5- Click on "Edit"

6. Select "Joining Date," then choose the Opening balance you want to add, enter a note, and then click "Update."

To ensure compliance, a complete record of all changes to leave balance or start date is maintained, whether they are manually adjusted, bulk uploaded, or through balance carryover settings.

Practical example: If an employee has 20 days of accrued annual leave and joins the company on July 1, 2025, choosing to calculate annual leave based on "Calendar" means that the 20 days of leave will continue until December 31, 2025, after which the remainder can be zeroed out or carried over to the next new year, depending on company policy.

However, if annual leave is calculated based on joining date, the leave will be calculated based on the contractual year, meaning the employee will have 20 days of accrued annual leave until July 1, 2026.

Note: The user can specify a custom date to start calculating the balance.

Note: When defining a new employee in the system, the method of calculating the annual leave balance is based on the “calendar.”