Table of Contents
Introduction
Taking care of leftover leave is one of the many tasks to address as the new year approaches. According to your company policies, you might need to write off or pay off residual leave to a certain extent. You can do that in bulk or individually.
The end of the year is not the only time you may need to pay off leave, though. When employees move on to new opportunities, it's important to know how to accurately pay off their unused leave individually—if that's the company decision.
In this article we'll cover the steps to achieve this. So, put on your mask and 🏊 dive right in 👇.
Paying off Leave from the Employees' Section
Go to HR > Main > Employees.
Click on the employee for whom you want to pay off leave, then click the Leave Entitlement tab.
Click on the type of leave you want to pay off.
Click on the Leave Payoff for Employee button in the functions bar.
Choose the Payroll in which to pay off this leave entitlement, and select the number of Hours to pay off.
In the pop-up window, click Submit.
The payoff is reflected in the payslip under Adjustments in the Payroll Calculations page.
The remaining leave entitlement balance will be affected once pay calculations are done for the employee receiving the leave pay-off.
🧠 Pro Tip
If you haven't set up the selected Leave Type to be paid off on termination, a message will show on the bottom right of the page.
The message states that 'You Cannot Pay Off leave, since Leave Type is not set up as Pay Off on Term'.
To correct this, navigate to Payroll & Leave > Leave Types > select the needed leave type > click on ✏️ Edit.
In the Pay Off section, make sure to change the value from 'None', to either 'Pro-rata' or 'Full balance' in the Pay off on term. dropdown field. Expand the sections below to understand which option better suits your needs 👇.
Pro-rata pay-off
Pro-rata pay-off
Example:
A full time employee gets terminated on the 28th of February 2025
VAC25 leave entitlement = 224 hrs assigned from the 1st January 2025.
The employee was employed for 59 calendar days in 2025.
Pay-off days calculation formula:
(No. of calendar days till employment termination / 365 days) * Leave entitlement for the entire year = (59d /365d) * 224hrs = 36.21 hrs can be paid off.
Full balance pay-off
Full balance pay-off
Example:
A full time employee gets terminated on the 28th of February 2025
VAC25 leave entitlement = 224 hrs assigned from the 1st January 2025.
The employee was employed for 59 calendar days in 2025.
The employee took three days of leave.
Pay-off days calculation formula:
Leave entitlement for the entire year - Leave days used = 224 hrs - 24 hrs= 200 hrs can paid off.
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