Leave Calculation Confusion: Is It Based on Calendar Year or Financial Year?

Hi, I need advice on how leave is calculated. Is it based on the calendar year, i.e., from January to December, or the financial year, i.e., from April to March?
Regards

Hi,

It varies from organization to organization, but most of the time it is from January to December. Leave is not a part of CTC.

Regards,
Nidhi

Dear,

Earned Leaves are accounted for the FY, the un-availed portion of which carries forward to the New Financial Year and thereafter until the employee leaves the organization either by resigning or by retirement. If he/she joins a new organization, the count begins at "0". At the time of leaving, the balance period of leaves is to be reimbursed as per the Financial Regulations (Fin Regs).

All other leaves are accounted for on a calendar-year basis, and any unavailed balance during the year will be forfeited and will not be carried over to the next year as mentioned above.

Regards,

Sarma - Mng(Adm)

It is advisable to calculate Privilege/Earned leave synchronizing with the Financial Year of the company (in your case from Jan to Dec) as it will facilitate the company for making provisions out of the current year's profits on account of Privilege leave encashment payable to employees at the time of retirement.

In case the leave account is maintained from Apr to Mar and FY is from Jan to Dec, the leave account of each employee has to be adjusted for three months synchronizing with the FY of the company every year for calculations of the above provisions which will increase the workload at the time of Annual Closing.

TR CHHABRIA
Mob: 9818444595

Dear,

Leave is for the calendar year only. Leave is calculated as one day for every 20 days worked. It is earned leave/annual leave. This is applicable for workmen only, subject to eligibility of 240 days worked in the previous year. If joined in the middle of the year, he should have worked 2/3 of the available days after his joining.

However, for staff, it varies depending on company policy.

With Wishes, N Kannabiran

Dear Sir,

My question is, "If an employee is offered a leave reimbursement amount for consolidated leave, i.e., 30 days, and the amount for the same is Rs. 45,000, is this amount part of the CTC component? Please advise me.

Regards,
Santosh HR

Dear All,

For maintaining the leave accounts of individual employees, the calendar year is the best option. The largest employer in our country is the Government of India, which has over a century of experience. Since October 1, 1976, the GOI has standardized the earned leave accounts of all central government employees. Additionally, starting from January 1, 1986, half pay leave accounts have also been standardized. When an employee is recruited in the middle of the year, they are entitled to 2.5 days of earned leave for each completed calendar month until June 30th or December 31st, with regular advance leave credit on July 1st and January 1st every year. Similarly, a proportionate credit of half pay leave is provided until June 30th and December 31st, with an advance on July 1st and January 1st.

This system reduces the burden on HR in calculating leave for staff members and officers. I recommend that the private sector consider adopting a similar approach.

Shyam Agrawal

Casual leave, if any balance remains at the end of the year, lapses and cannot be carried forward in normal cases.

As per the Factory Act, it is calculated from Jan - Dec, i.e., Calendar year. Most organizations apply this rule to the workers. In the case of staff members, it is normally calculated based on the joining date of the employee.

Thanks,
Prakash Salunkhe

It will be from the financial year only. As we maintain new accounts from April only. Maybe depend upon company policies also.

Hi!

Generally, leave is calculated for the calendar year only, but some companies follow the financial year. Hence, in order to make the correct decision here, we can follow the government organization in performing calendar year calculation.

Hi,

It depends on whether you are under The Shops & Est. Act or The Factories Act. For both acts, leave is based on the calendar year, i.e., January to December.

The Shops Act will depend on the state in which your organization is located. If it is a factory, there can be two types of employees: those on the rolls from January 1st and those who join after January 1st. The first set of employees will be entitled to one day of leave for every 20 days worked, provided they have worked for not less than 240 days from 1/1 to 31/12. The second set of employees will get leave at the same rate, but only if the ratio of "total worked days of the employee" to "the total workable days from his/her date of joining to 31/12" is equal to or more than 2/3. The ratio is set at 2/3 because the ratio of 240 to 365, the days of the year, is 2/3.

I hope this clarifies the information.

Shrikant