![Leave types](/files/help/shot-leave.png)

A **Leave Type** is the name of the time off, such as vacation or sick time. Employees can request only the types on the policy assigned to them.

## Add a type

1. Open **Leaves**, then **Leave Type**.
2. Choose **New Leave Type**.
3. Enter **Leave Type Name**. **Code** and **Max Leaves Allowed** are optional.
4. Set the rules you need, then choose **Create Leave Type**.

You should see **Leave Type created**. The list columns are **Name**, **Code**, **Max Leaves**, and **Active**. Search says **Search leave types...**

An empty list says **No leave types yet** and **Set up sick, casual, and other leave categories your policy uses.**

## What the rules mean

- **Policy kind** can be **Accruing**, **Unlimited**, or **Manual**. Unlimited time shows as **Unlimited** on balances and on **PTO Report**.
- **Is Leave Without Pay** and **Allow Negative Balance** still allow a request when the day balance is zero.
- **Allow Carry Forward** lets unused time move forward, up to the policy’s carry-forward limit.
- **Include Holidays** counts holidays inside the request as time off.
- **Is Compensatory** marks the type used when someone requests time off for a day they worked.
- **Allow Encashment** allows a cash-out of unused time.
- **Pay out unused time when employment ends** marks unused time to be paid when the person leaves.
- **Hide the type on the team calendar** keeps that type off the shared view. On **Who's out** it shows as **Out**.
- **Hours worked for each hour accrued** is used when the policy accrual schedule is **Hours Worked**.
- **Protected hours** caps how many hours of this type can be used. A longer request says **This request is longer than the protected hours still available.**
- **Vacation pay percent of wages** and **Vacation pay percent after 5 years** set the pay percent used for that type.
- **Active** leaves the type available. Turn it off when new requests should stop using it.

## If something looks wrong

**Leave Type Name** is required. If it is empty, the type is not created and the dialog stays open. The notice is **Failed to save**, or it names the missing field.

A type that is not on the person’s assigned policy cannot be requested. The message is **This leave type is not included in the employee's assigned policy.**

The portal says **No leave types available** when there is nothing to choose.

## Next

Put the type on a policy, then give that policy to the employee. See [Assign a policy](/hrms/leaves/assign-a-policy).