What's covered in this guide?:
Leave Proration
Leave proration adjusts an employee’s leave entitlement when their working pattern or contract changes during a leave year. This ensures leave balances are accurate and reflect the time actually worked.
Proration may apply when:
An employee starts or leaves part-way through the leave year.
Contracted weekly hours or days change.
The leave calculation method changes (e.g., daily vs monthly).
How Leave Proration Works
Leave proration applies when:
An employee starts or leaves part-way through the leave year.
Their contracted weekly hours or days change.
You change your leave calculation method (e.g., daily vs monthly).
Our proration logic calculates the proportion of annual leave entitlement an employee should receive based on their working time in that period.
Leave Proration Method Setting
You can choose how leave balances are prorated when they are first created or recalculated.
To select a proration method:
Navigate to Settings > Leave > Leave proration method
Available Methods:
Monthly (default)
Uses the UK Gov recommended monthly proration method.
Rounds to the nearest month.
May result in slightly higher entitlements, as part-months are counted as whole months.
Daily
Calculates proration based on the exact number of days remaining in the leave year.
More precise and may result in slightly lower entitlements than monthly proration.
Example: Monthly vs Daily Calculation
Example values:
Contracted Hours per Week (CHW) = 31
Months remaining in leave year = 7
Days remaining in leave year = 206
Method | Formula Example | Result (hours) |
Monthly | (5.6 × CWH) × (Months remaining ÷ 12) | 101.27 |
Daily | (5.6 × CWH) × (Days remaining ÷ 365) | 97.98 |
CWH = Contracted Weekly Hours
When This Applies
The selected method is used when:
Creating a new leave balance (e.g. when tagging an employee with a leave type).
Running Generate Entitlement from the Recalculate modal.
Adjusting leave balances after changes in contracted hours/days (via UI, CSV, or API).
Changing the Method
If you do not change the setting, Monthly will be used by default.
Switching to Daily only affects new balances created after the change.
Existing balances remain unchanged unless recalculated.
Generate Entitlement in the Recalculate Modal
You can now quickly recalculate a user’s starting balance using the latest proration logic.
How to Generate Entitlement:
Go to User Profile > Leave Balances.
Click Recalculate next to the relevant leave type.
Click Generate Entitlement to run the most up-to-date proration calculation.
Review the Suggested Entitlement result.
Click Recalculate with this value to update the starting balance instantly.
Why it’s useful:
No manual calculations needed.
Always reflects the latest proration rules.
Leave Balance Report
Two new columns are now available in the UK Leave Balance report:
Prorated Starting Balance:
The total leave an employee should have for the period.Prorated Current Balance:
The remaining leave for that period (acts like an “exit balance”).
How it works:
Active users: Calculated as if the employee’s end date was today.
Inactive users: Calculated using their termination date.
Where to find:
Go to Reports > HR > Leave Balance Report.
Look for the new columns in your report view.
FAQs
What’s the difference between daily and monthly proration?
What’s the difference between daily and monthly proration?
Daily: Entitlement is calculated based on exact days worked.
Monthly: Entitlement is calculated in whole monthly increments.
Can I still manually adjust a starting balance?
Can I still manually adjust a starting balance?
Yes. You can manually edit the balance at any time, but the new Generate Entitlement button makes it faster and more accurate.