Run the leave year-end process

The Leave Year-End Process in HRStop helps organizations finalize leave records for the current leave year and prepare for a new one — whether your leave cycle follows a calendar year (Jan–Dec) or financial year (Apr–Mar).

This process is crucial to ensure all leave balances are correctly:

• Carried Forward (as per carry-forward rules)
• Encashed (if allowed by policy)
• Lapsed (if neither carried nor encashed)

Prerequisites before running the year-end process

To maintain data accuracy and compliance with payroll, complete the following tasks before running the Year-End Process:

1. Approve or reject all pending leaves

• Make sure all leaves up to and including the transaction month (usually December) are finalized.
• Leaves still in Pending status may interfere with proper balance calculations.

2. Do not approve future-dated leaves

• Avoid approving leaves applied for the next leave year (e.g., January) before running year-end.
• The system auto-adjusts these later, but manual approvals may affect balance syncs.

3. Run payroll for the transaction month

• Mandatory Step: Ensure payroll for the last leave month (e.g., December) is processed before running this process.
• Why? If payroll isn't run, negative leave balances won’t be deducted (LOPs) and may roll over incorrectly.

Best Practice: Run payroll → Then perform year-end → Then credit new year's leaves.

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How to run the year-end process

Follow these steps to execute the Year-End Process:

Step 1: Navigate to the year-end option

• Go to Control Panel → Leaves → Balance.
• Click the dropdown next to Manually Adjust.
• Select Run Year-End Process.

Step 2: Configure year-end settings

Select the transaction month

• Choose the month that marks the end of your leave year (e.g., December for a Jan–Dec cycle).

Define the leave encashment calculation basis

Select how the system should calculate the monetary value of encashed leaves:

Option	Description
LOP	Encash amount = value per Loss of Pay day (if LOP-enabled pay component exists)
Basic	Encash amount = value of 1 day of employee's Basic Salary
Specified	Fixed encash value per leave unit (e.g., ₹500 per leave)

If no LOP-enabled pay component exists in salary settings, LOP encash will result in ₹0.

Optional checkboxes

• Do not carry forward negative leave balance: Resets any (-ve) leave balance to zero for the next year
• Include deactivated employees: Ensures even inactive employees’ balances are included in encashment or carry forward

Step 3: Configure carry forward & encash limits

Eligible leave categories (where “Can be carried” or “Encashable” is enabled) will appear in a table.

For each leave category

• Enter Carry Forward Limit (e.g., 10 leaves max)
• Enter Encash Limit (e.g., up to 5 leaves can be encashed)

Leave categories without carry or encash rules will automatically lapse during this process.

Step 4: Preview and modify

Click Next to proceed through confirmation stages:

Carry forward preview

• See an employee-wise breakdown of leaves that will be carried forward
• You can:
  • Edit values manually
  • Upload in bulk using the Import Carry Forward Balance feature

Encashment preview

• Displays:
  • Number of leaves to be encashed per employee
  • Corresponding encash amount (based on chosen calculation method)
• You can:
  • Download/Upload a sheet using Import Leave Encashment Balance

Final step: complete the process

After reviewing and validating all values:

• Click Next
• Click Finish

The system executes the process and applies the changes immediately.

What happens after running the year-end process?

Here’s what the system does automatically:

Action	Outcome
Carried Forward Leaves	Added to employee balances for the new year starting January 1
Encashed Leaves	Added as arrears in the next payroll cycle
Lapsed Leaves	Removed from the system (leaves that exceeded carry + encash limits)
New Year Credits	New entitlements (if configured) are triggered as per leave credit rules