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Common Practices of Vacation Accrual Rules

Common Practices of Vacation Accrual Rules

Monday March 27, 2017,

4 min Read


Common practices of vacation accrual rules in companies. With a wide variety of leave types and vacation accrual rules used in different companies, it might be hard to define which leave tracking process would meet a company’s needs better. National, regional and company’s internal accrual procedure may imply many mechanisms of leave time accrual, which sometimes can be confusing. Most companies prefer easier leave time tracking and vacation accrual rules. However, special requirements are not uncommon.

Accruing vacation time

Vacation accrual mechanisms differ from company to company. Accrual rules can have multiple parameters, so let’s take a look at the most popular options.

Accrual period. Employees of most companies accrue vacation days monthly, but weekly and yearly intervals are also possible. Daily leave time accrual can be an option in companies with higher turnover rates.

Equal or progressive leave time amounts. Leave time can be accrued in equal amounts every year or progressively – depending on the years of employment.

A waiting period can be designated before the vacation begins to accrue; depending on applicable legislation, it can take from three months to one year.

Two different balances, one for vacation days and one for sick days. They should be tracked separately; with that said, other leave types can exist that don’t affect either of these two balances.

Using balance cap. If employees are reluctant to spend their time off, companies often choose to introduce a balance limit to keep the overall amount of available leave time within a reasonable range. In this case, it is important to follow the legal guidelines and regulations that indicate the reasonable proportion of the balance cap.

Overwork bonuses and time off in lieu. Some employers prefer to compensate their employees’ overtime by adding hours or days to their leave balances.

Different leave time amounts, for example for full-time and part-time employees, or for managers and regular employees.

Spending vacation time

Leave time usage rules also differ. A common practice is to not allow the employee to take vacation in the first six months – or, in the US and some other countries, in the first year of employment.

Leave time can be deducted differently from the balance. In some companies, the internal procedure can imply using a coefficient for deducting leave time from the balances.

There can be leave types that do not affect leave balances at all. Mostly, these are one-time and extraordinary leaves, or leaves that aren’t used very often: sabbaticals, military service leaves, time off for voting, and some other leave types.

In many companies, the “use it or lose it” principle is implemented for some vacation types. If an employee does not use their leave by the specific date, it is forfeited.

Automating vacation accrual

It is important to keep track of used and unused vacation accurately to avoid misunderstanding and workplace conflicts. Some companies prefer the old-fashioned way, with spreadsheets and paper requests. This consumes valuable time that could be spent doing actual work. Fortunately, there are software solutions available that provide more convenient ways to track leave time accrual and spending.

When selecting a tool for automated vacation accrual, there are a few things you should definitely keep in mind:


Simple leave tracking procedure;

Availability from any device;

Rich data review options.

Easy vacation accrual with actiPLANS

actiPLANS offers a smooth way of time-off calculation and leave request management. Managers configure the system so that it complies with accrual rules used in the company, and regular users request their leaves and get them approved easily. Flexible configuration options allow managers to set everything up in accordance to the company requirements and automate the entire process.

The tool supports two separate balances: paid time-off and sick days, in days or hours depending on the company’s internal procedure. If a company does not use one or both of the balances, they can be disabled.

Managers can use preset leave types or set up custom ones. Every leave type can be configured to affect paid time-off or sick days balance, or neither. Manual corrections of both balances are also possible.

For those employees whose vacation accrual rules differ from the corporate ones managers can specify individual settings.

This way, actiPLANS provides a convenient configuration of vacation accrual rules and keeps all data on employees’ leave balances available and up-to-date.


Vacation accrual and leave balances calculation is an important part of any company’s internal procedure, so it is critical to find a tool that will simplify and speed up this process. actiPLANS can be configured to fit almost any requirements, allowing both managers and regular employees to benefit from the automated the accrual process, keeping things accurate, transparent and hassle-free.