"How many leaves do I have left?" is probably the most-asked HR question in any small company — and the answer is often a guess. Casual leave that is credited monthly and carried forward is fair to employees and easy to budget for, but only if the balance is calculated the same way every time.

Here's how monthly accrual with carry-forward works, with examples, and the rules that keep balances honest.

Annual quota vs monthly accrual

There are two common ways to give casual leave:

  • Annual quota: the full year's leave (say 12 days) is available on 1 January. Simple, but someone can take all 12 in February and resign in March.
  • Monthly accrual: leave is earned as you work — for example one day credited every month. A new joiner starts small and builds up; nobody can take leave they haven't earned yet.

Monthly accrual is fairer for growing teams with regular joiners, which is why it's so common.

The four settings that define a policy

  1. Monthly credit — how many days are added each month (often 1).
  2. Maximum balance — the cap on how much can pile up (for example 12).
  3. Opening balance — what a new employee starts with (often 0).
  4. Probation — how many months after joining before accrual starts (often 0).

A worked example

Policy: 1 day a month, maximum 12, opening balance 0, no probation.

  • Joins in April: April's credit makes the balance 1.
  • May, June: balance grows to 3.
  • Takes 2 days in July: July credit makes it 4, approval brings it to 2.
  • Takes no leave for a year: the balance climbs to 12 and stops — extra credits are not added beyond the cap.

That last point is what "carry-forward up to a cap" means: unused leave rolls over month to month, but there's a ceiling so liabilities don't grow forever.

Rules that stop arguments

  • Don't let people apply for more than they have. When checking a request, subtract other pending casual-leave requests from the balance too — otherwise someone can submit three requests that each look fine on their own.
  • Deduct on approval, not on request. A pending request shouldn't reduce the balance; an approved one should.
  • Keep a ledger. Every credit, deduction and manual adjustment should be recorded with a date, so any balance can be explained line by line.
  • Decide what happens when balance runs out. Usually extra days become leave without pay (LWP), which then reduces salary.

Why spreadsheets get this wrong

Accrual in a spreadsheet depends on someone remembering to add the credit every month, for every employee, without double-counting. Miss a month and the balances drift; add it twice and they inflate. Corrections then overwrite the history that would have explained the mistake.

How Punchly handles accrual

In Punchly you set the monthly credit, maximum balance, opening balance and probation in Settings. Credits are applied automatically for every whole month since the last one — including the joining month — and never twice, so there's no job anyone has to remember to run. A casual-leave request is blocked when the balance minus pending requests doesn't cover it, approval deducts it, and every movement is kept in a ledger. Employees see their balance on their dashboard; managers with approval rights can view and adjust balances for their team. See leave management.