What is Leave Balance?

The term leave balance refers to the amount of unused time off a particular employee has left in their sanctioned annual leave quota. As it’s often referred to, the ratio is typically calculated by subtracting hours taken off from hours available or the days taken off from the days available.

Types of leaves

There are different types of leaves that employees can avail, and their leave balance is calculated based on that –

Casual Leave (CL):

Casual leaves or sick leaves are basic leaves provided by employers to employees to be used in case of personal emergencies like sickness, accident or family events. Casual leaves are paid leaves. There are labor laws in place to ensure employees get a minimum number of casual leaves per year or month (12-15 days a year). Casual leaves cannot be encashed and they lapse at the end of the year.

Earned Leave (EL):

Earned leave or privileged leave is a type of leave given to an employee based on the number of days they have worked at the company (e.g. 20 days). There are labor laws in place that ensure employees get earned leaves throughout the year. All companies must give employees earned leave. Earned leaves are paid leaves, and if they are not availed by the end of the year, employees can encash the leaves or carry it over to the next year.

Maternity Leave (ML):

Maternity leaves are mandatory paid leaves that employers must provide to any pregnant woman in their organization. There are labor laws in place to ensure pregnant women workers can avail this benefit. For example, in India, the Maternity Benefit act 1961, women workers can take maternity leave of 180 days (6 months) given they have worked for the company in the past year.

Compensatory Off (Comp-off):

Compensatory days off are earned by working extra hours or extra days. Employees can work extra hard and earn extra leave if they want to extend their leave benefits. Compensatory offs are usually additional benefits/ leaves that employees can enjoy on top of their usual benefits like earned leaves, casual leaves and other leaves.

Marriage Leave:

Marriage leaves can be provided to employees who get married. Most countries do not have a specific rule for it, but some do have the marriage leave benefit. For example, In India, under the All India Leave rules, employers can provide a minimum of 3 days to a maximum of 2-week marriage leave to employees.

Paternity Leave:

Paternity leave is provided to new fathers who want to spend time taking care of their newborns. Most companies offer paternity leaves. However, it may not be as long as maternity leave.

Bereavement Leave:

Bereavement leaves are provided to employees in case of unexpected passing of a family member. Bereavement or compassionate leave can also be granted to an employee to take care of a sick family member. There are no fixed rules around this type of leave, but companies can provide anywhere between 2-20 days (about 3 weeks) of bereavement leave.

Loss of Pay (LOP) / Leave Without Pay (LWP):

Loss of pay is a type of leave which an employee can take when they are out of leave, or they have no leaves available in their leave balance. It is an unpaid leave which an employee can take in case they absolutely have to take a leave but have no leaves left in the balance.

Key terms regarding Leave balance

  • Accrual rate: This is the rate is which leaves are allotted to an employee, it depends on tenure, hours worked and the pay cycle.
  • Opening balance: The leave balance often starts at the beginning of a defined period like a month, 6 months or a year. For example, a company can allot 1 casual leave to employees at the beginning of every month.
  • Carry Over: Leaves like earned leaves can be carried over to the next pay cycle or the next calendar year. These leaves can also be encashed before they lapse.
  • Leave Usage: Leave usage is the number of leaves an employee has utilized in a month or a certain period. It determines how much leaves are left in the leave balance.
  • Leave encashment: When employees do not use their earned leave in the set year, their leaves can either be carried over to next year or encashed. Employees have the option of using the earned leaves or encashing them when the time comes.

Leave balance shows an employee how much leaves the employer has allowed them over a period, and how much they have used. It is essential to check the leave balance before an employee takes a leave.

Leave Balance – FAQs

How to ask for leave balance?

To ask for a leave balance employees can apply for the leave to their manager and HR department through an email. If a company uses any leave management software, they apply for the leave through the portal.

What is a leave balance report?

Leave balance report is used to track the leave usage by an employee over a certain period.

What does balance mean in annual leave?

Leave balance means the number of leaves available for an employee to take over one year, leaves are deducted as the employee keeps using the balance over the period.

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