In the Vacations and Leave module, each employee’s balance is calculated by combining three settings:

• Cycle (Activity period)

• Accrual frequency

• Accrual timing (only when the frequency is annual)

Understanding how these interact is key to avoiding implementation errors and discrepancies in balances.

• The cycle defines the date range over which the employee’s annual entitlement is calculated. It’s the policy’s reference “year.”

  For example, it can be set as:

  • January to December.
  • October to September.
  • Based on the hire date.
  • Any custom annual period.

  Important: The cycle does not determine when days are credited. It only defines the period they belong to.

• The frequency defines how often days are credited within the cycle.

  • Annual: The total number of days is credited at a single point in the cycle.
  • Monthly: The annual total is divided into 12 equal parts and credited month by month.

  The frequency sets the pace of accrual, but not the exact moment it happens.

• Accrual timing indicates when days are credited within the cycle. This setting only applies when the frequency is annual.

  • Start of the cycle: Days are credited at the beginning of the cycle.
  • End of the cycle: Days are credited at the end of the cycle (“worked year / completed year” logic).

  For monthly frequency, accrual timing is not set, since days are automatically credited each month.

Now let’s look at each option in detail. Select the one that matches your policy to understand when days are credited, how configuration changes affect balances, and what to consider when implementing or migrating.

• 

  Days are fully credited on the first day of the configured cycle. When the policy is assigned to an employee, the system automatically credits the total number of days for the current cycle.

  In this setup, the accrual year matches the cycle the days belong to.

  Behavior when changes occur:

  • The system constantly recalculates balances.
  • Changes to base assignment, hire date, or seniority have an immediate impact.

  Carryover:

  Carryover expiration is calculated from the end of the cycle. If 1 month of expiration is set, the employee has the 12 months of the cycle plus 1 additional month.

  Example:

  Cycle October–September. The 2024 cycle runs from October 1, 2024 to September 30, 2025. Days are credited on October 1, 2024. The accrual year is 2024.

• 

  Days are credited at the end of the configured cycle. Until that date arrives, the balance will be 0.

  In this setup, the accrual year does not match the cycle the days belong to, since days are credited at the end of the period.

  Behavior when changes occur:

  • Balances are not constantly recalculated.
  • Changes take effect at the next automatic accrual.

  Carryover:

  Expiration is calculated from the end of the cycle. If 1 month of expiration is set, the employee will have only 1 month to use the credited days.

  Example:

  Cycle October–September. The 2024 cycle runs from October 1, 2024 to September 30, 2025. Days are credited on September 30, 2025. The accrual year is 2025.

• 

  Days are credited proportionally month by month (1/12 of the configured annual total).

  Accrual timing is not set, since days are automatically credited each month.

  Behavior when changes occur:

  • Balances are not constantly recalculated.
  • Changes take effect going forward.

  Carryover:

  Carryover and expiration work on a monthly basis. Each accrual can have its own expiration.

  In this setup, the accrual year and the cycle the days belong to do not match, just like in an “end of cycle” policy.

  Example:

  If 12 annual days are set in a January–December cycle, the employee will receive 1 day per month.

How balances work in Vacations and Leave depends directly on how the cycle, frequency, and accrual timing are combined.

Before activating a policy, it’s essential to make sure these three settings accurately reflect both the country’s regulations and your company’s internal logic.