Leave Type
Leave Type
is the term for the multiple types of leave that an employee can select from when they submit a Leave Application in the system. These categories assist in maintaining leave records systematically and determine what type of leave is being applied for and why.
According to the needs of your organization, the customs of your business, or the law, you can create as many Leave Types as necessary. You may alter the leave system to suit your company's policies and requirements of your employees since it is versatile.
In order to proceed to Leave Type, follow these steps:
1. Creating a Leave Type
Click on New in the list of Leave Types to begin creating a new Leave Type record.
Input the Leave Type Name, ensuring it is readable enough for employees and managers to know what it's for.
You can make more restrictive settings on how much of this type of leave may be taken by filling in the Maximum Leave Allocation Allowed, the Applicable After (Working Days), and Maximum Consecutive Leaves Allowed (optional).
To retain your new Leave Type for future usage in Leave Policies and Allocations, click on Save.
The following is a complete description of all fields and check boxes under Leave Type. You can set specific rules and restrictions for improved leave management in each of these fields.
Maximum Leave Allocation per Leave Period: This allows you to select the maximum amount of days a particular type of leave can be used in a specific leave period. This is particularly useful for ensuring that all staff have the same amount of time away with still complying with the regulations.
Allow Leave Application After (Working Days): sort in the minimum number of working days the employee should have worked from the date of his/her joining to be eligible to take this type of leave. This feature can ensure that fresh employees serve a probation period before they can avail certain types of leave.
Maximum Number of Consecutive Days of Leaves: This places a cap on the maximum number of days an employee is allowed to be away from work for this type of leave consecutively. To prevent anyone from gaming the system, any additional days beyond this threshold will be automatically counted as "Leave Without Pay."
**If you check "Carry Forward," unused leave days will be carried over into the next allocation period. This is useful for annual leave schemes where leave balances accumulate over a period of time.
Is Leave Without Pay: This indicates the leave type as unpaid, so the employee's pay will be reduced by an amount for the entire duration that they are on leave.
Is Optional Leave: Employees may choose from a defined list of optional holidays. By configuring the Max Days Leave Allowed, you can restrict how many optional holidays an employee may take.
Allow Negative Balance: This allows employees to request and receive leave despite having a negative balance of leave. This can be useful for very exceptional situations where pre-approval is provided.
Allow Over Allocation: This feature allows administrators to provide more leave than is normally permissible at the time of allocation. This provides them with more scope in special cases.
Include holidays in leaves: If you enable this feature, any holidays within the period of leave will be counted as leave days, which will alter the total number of leave you are allowed to take.
Is Compensatory: This type of leave is provided for working overtime or during vacations. These can also be encashed, based on the company's rules.
Partially paid Leaves: This indicates the leave as partially paid, meaning that employees receive a small portion of their daily salary during leave. In Fraction of Daily Salary Per Leave, you can define this percentage.
2. Characteristics
2.1 Cashing in leave
At the conclusion of a leave period, staff may receive payment for unused leave. "Allow Encashment" must be switched on only for leave types that can be encashed.
Non-Encashable Leaves: This indicates how many days you cannot cash in from your leave balance.
Earning Component: This component of the compensation is directly added to employees' compensation Slip once they apply for leave encashment.
2.2 Leave that you earned
Employees accrue earned leaves during their employment with the company. If you select "Is Earned Leave," the system will grant you leaves depending on the Earned Leave Frequency you specify (monthly, quarterly, etc.).
If an employee is awarded 24 leaves per year and the frequency is monthly, then they receive 2 leaves at the end of every month. This is automated through the leave allotment background job.
2.3 Default Leave Types
There are already established types of leave in ERPNext, such as
Leave Without Pay: Unpaid absence for various reasons.
Privilege Leave: Paid time off for personal vacation or recreation.
Sick Leave: for being sick or recovering from an illness.
Compensatory Off: Time off for working extra hours or on vacations.
Casual Leave: A short break from work for urgent, unexpected reasons.