Leave Policy
A Leave Policy bundles multiple Leave Types with annual entitlements into one assignable package. Instead of allocating each leave type manually for every employee, you define a policy once — "Standard Full-Time US" or "India Grade A" — and assign it via Leave Policy Assignment to credit balances automatically.
Table of Contents
- Overview
- Where to find it
- Leave types vs. leave policy
- Creating a leave policy
- Policy rows explained
- Assigning policy to employees
- Key fields
- Carry forward and encashment
- Annual rollover workflow
- Tips
- Troubleshooting
- Related guides
Overview
| Aspect | Detail |
|---|---|
| DocType | Leave Policy |
| Desk path | /app/leave-policy |
| Setup section | Leaves sidebar → Setup → Leave Policy |
| Used with | Leave Policy Assignment, Leave Allocation, Leave Period |
Policies standardize entitlements across cohorts — all full-time staff get the same annual leave package, with optional variations by region or grade.
Where to find it
| Access | Path |
|---|---|
| Leaves sidebar → Setup | /app/leave-policy |
| Leaves workspace → Setup card | Leave Policy |
| Related assignment | /app/leave-policy-assignment |
| Bulk tool | /app/leave-control-panel |
Also configure supporting masters:
| record | Path |
|---|---|
| Leave Type | /app/leave-type |
| Leave Period | /app/leave-period |
| Holiday List | /app/holiday-list |
Leave types vs. leave policy
| Layer | Purpose | Example |
|---|---|---|
| Leave Type | Rules for one category | Sick Leave — max 10 consecutive, carry forward |
| Leave Policy | Entitlement bundle | 12 Casual + 15 Sick + 10 Earned per year |
| Leave Policy Assignment | Employee gets policy | Jane Doe → Standard Policy from Jan 1 |
| Leave Allocation | Actual balance credit | +12 Casual on Jan 1 (from policy or manual) |
Create Leave Types first, then reference them in Leave Policy rows.
Creating a leave policy
Step 1: New policy
- Leave Policy → Add Leave Policy.
- Enter Title — descriptive name (e.g., "Full Time – 2026 Entitlements").
- Select Company (if company-specific).
Step 2: Add leave details
In the Leave Policy Details table, add one row per leave type:
- Leave Type — link to existing type.
- Annual Allocation — days credited per leave period (e.g., 12).
- Optional Maximum Carry Forwarded Leaves — cap on rollover (may inherit from Leave Type).
Step 3: Save
Save the policy. It is now available for Leave Policy Assignment and Leave Control Panel.
Repeat for regional variants (different holiday calendars or statutory minimums).
Policy rows explained
| Column | Description |
|---|---|
| Leave Type | Which category this row configures |
| Annual Allocation | Days granted per allocation cycle |
| Maximum Carry Forwarded Leaves | Override carry cap for this policy row |
Annual Allocation is pro-rated when assignment mid-period if your Leave Control Panel or assignment logic supports pro-rata (common for new joiners).
Leave Type-level rules still apply:
| Leave Type rule | Effect on applications |
|---|---|
| Max consecutive | Limits single request |
| Applicable after X days | New hire waiting period |
| Is LWP | Unpaid — no balance needed |
| Is optional leave | Special holiday selection |
Assigning policy to employees
Leave Policy Assignment
- Go to
/app/leave-policy-assignment. - Add Leave Policy Assignment.
- Select Employee, Leave Policy, Assignment Based On (Leave Period or Joining Date).
- Effective From date.
- Submit — triggers allocation generation per system rules.
Leave Control Panel (bulk)
For mass assignment at year start:
- Open
/app/leave-control-panel. - Select Leave Policy, Leave Period, employees (filter by department/branch).
- Run Assign Leave Policy or Allocate Leaves action.
Key fields
Leave Policy header:
| Field | Description | Required |
|---|---|---|
| Title | Policy name | Yes |
| Company | Scope | Optional |
Leave Policy Details rows:
| Field | Description | Required |
|---|---|---|
| Leave Type | Category | Yes |
| Annual Allocation | Days per period | Yes |
| Maximum Carry Forwarded Leaves | Rollover cap | No |
Leave Policy Assignment:
| Field | Description | Required |
|---|---|---|
| Employee | Assignee | Yes |
| Leave Policy | This policy | Yes |
| Leave Period | Active period | Yes |
| Effective From | Start date | Yes |
Carry forward and encashment
Configure on Leave Type (master), optionally overridden on policy row:
| Setting | Behavior |
|---|---|
| Is Carry Forward | Unused balance rolls to next period |
| Maximum Carry Forwarded Leaves | Cap on rolled days |
| Allow Encashment | Eligible for Leave Encashment |
Year-end process:
- Run Employee Leave Balance Summary report.
- Encash or lapse per policy.
- Create new Leave Period and re-run Leave Policy Assignment / allocations.
Annual rollover workflow
Recommended sequence each fiscal year:
1. Close prior Leave Period (no new applications)
2. Process encashments / lapse adjustments
3. Create new Leave Period
4. Bulk Leave Policy Assignment (Leave Control Panel)
5. Verify allocations submitted
6. Communicate balances to employees
7. Open period for new Leave Applications
Document effective dates in company HR policy handbook to match Smooth HR configuration.
Tips
- Align policy names with HR handbook — reduces employee confusion.
- Separate policies by region — statutory leave differs by country/state.
- Do not duplicate types in one policy — one row per leave type per policy.
- Test pro-rata — hire a test employee mid-year and verify allocation.
- Review block lists annually — update before peak season.
- Keep Leave Type rules DRY — policy only sets quantities; behavior stays on type.
Troubleshooting
| Issue | What to do |
|---|---|
| Assignment did not allocate | Submit assignment; run allocation from Control Panel |
| Wrong entitlement amount | Edit policy row; re-allocate with adjustment allocation |
| Employee has two policies | Cancel duplicate assignment; one active per period |
| Carry forward wrong | Check Leave Type carry settings and max cap |
| New joiner zero balance | Pro-rata not run — manual Leave Allocation or Control Panel |
| Policy not in dropdown | Company mismatch; save policy first |
Sample policy templates
Full-time staff (example)
| Leave Type | Annual Allocation |
|---|---|
| Casual Leave | 12 |
| Sick Leave | 10 |
| Earned Leave | 15 |
Probation / first-year (example)
| Leave Type | Annual Allocation |
|---|---|
| Casual Leave | 6 (pro-rata) |
| Sick Leave | 5 |
| Unpaid Leave (LWP) | As needed — no allocation |
Regional statutory add-on
Add jurisdiction-specific types (e.g., privilege leave, maternity partner leave) as separate Leave Types, then include in a regional Leave Policy variant assigned by branch.
Always align handbook PDF with these numbers — employees compare wiki, handbook, and payslip.
Related guides
Last updated: May 2026