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How is Leave PayOff Worked when an Employee is Terminated?
How is Leave PayOff Worked when an Employee is Terminated?

Pro-Rata Leave PayOff Calculation

Jake Ellis avatar
Written by Jake Ellis
Updated over a week ago

Leave can be paid off in Full Balance, or Pro-Rata. Say an employee has 20 days of leave per year and termination date is in the middle of the year. The employee has taken 5 days of leave up till the date of termination.

Full Balance payoff will pay the employee for all the remaining leave balance  for the year i.e. the remaining 15 days.

Pro-Rata payoff will pay the employee for the remaining balance up until the termination date i.e. 5 days (Half of Year = 10 days of leave calculated, with 5 already taken). If the employee has taken 11 days of leave, and Pro-Rata payoff is used, then the employee will be paid nothing.

How to choose the pay off on termination method for a leave type

To set how leave types are to be paid off on employee termination:

  1. In the left sidebar of Indigo, click on Payroll.

  2. In the Leave section, click on Leave Types.

  3. Double-click on the leave type for which you want to set pay off type.

  4. Under Pay Off, choose either none, full, or pro-rata in the Pay off on term. dropdown menu.


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