# Leave management system for India 2026 | Beoblo

URL: https://beoblo.ai/in/en/leave-management-system/

> Leave management system for Indian companies: leave types, accrual, carry forward, approvals, holidays by location, LOP to payroll and the OSH Code rules.

People, companies and figures in product examples on this page are sample data, not customers.

Leave management system

# Leave management system for Indian companies

A leave management system keeps every employee's leave balance, applies your leave policy, routes requests to managers and passes unpaid leave to payroll. In Beoblo, HR sets leave types and accrual rules once; employees apply in a few clicks; managers approve with the balance in view; loss of pay reaches the payroll run automatically. Below: how it works, and the leave rules Indian employers follow under the labour codes.

## What a leave management system does

Every company in India runs leave somehow: a spreadsheet, an email to the manager, a register at the front desk. A **leave management system** replaces that with one record of every employee's balance and every request, and applies the policy the same way for everyone. It does four jobs:

**Keeps balances.** Each employee sees what they have left of each leave type, what is used and what is pending, and how the balance changed over time. **Applies the policy.** Accrual, carry forward, lapse, half days, notice days and the maximum days at a time are worked out by the system, not by hand. **Routes approvals.** Requests go to the right manager, who sees the balance impact before deciding. **Feeds payroll.** Approved unpaid leave becomes loss of pay (LOP) in the month's payroll, so no one has to re-key it.

For HR, the payoff is fewer questions ("how many days do I have?"), no year-end spreadsheet to roll balances forward, and leave data that matches payroll. For employees, it is knowing the answer before asking.

## For employees: apply, check, cancel

In Beoblo, an employee sees **their balance for each leave type** , with days used and days pending. When they apply, they choose full days or half days, and the system shows a **working-day preview** that leaves out weekly offs and holidays, so a request from Friday to Monday counts two days, not four.

They can **cancel a request before it starts** , and see the history of their balance: each credit, each leave taken and each adjustment. The home screen shows leave left, the next three holidays and who is out today.

Employees can also ask Kili, Beoblo's AI assistant, "what's my leave balance?" or "when is the next holiday?", and ask Kili to apply for leave. Kili checks the request against the rules, shows what it checked, and submits it only after the employee confirms.

## For managers: approve with the balance in view

A manager gets each request with the **balance impact** shown, and can approve or decline with a note. Before deciding, they see Kili's check of the request against the policy and a suggestion; the manager makes the decision.

The **team calendar** shows who is off and when, with pending requests faded and holidays shaded, so a manager can see clashes before approving. Managers can ask Kili "who is on leave this week?". Their home screen lists approvals waiting and the team's week.

Managers see their own team only. They do not see salaries, so leave approvals never expose pay.

## For HR: set the rules once

HR defines each **leave type** with its rules: paid or unpaid, half days allowed, needs approval, can go negative, encashable, the maximum days at a time and the notice days required. Typical Indian types (earned or privilege leave, casual leave, sick leave, maternity leave, comp-off and loss of pay) are each a leave type with their own settings.

**Leave profiles** decide how much each group gets: days per year, credited upfront or monthly, carried forward with a cap and an expiry or lapsed at year end, and pro rata for mid-year joiners. HR assigns profiles to employees, with a default for new joiners, so a factory team and an office team can follow different rules in one company.

HR can enter opening balances when moving from spreadsheets, add comp-offs, adjust a balance with a reason, and apply leave on behalf of someone who cannot. The **year-end run** carries forward or lapses balances by profile, with a preview before anything changes. Holidays are set per year and **per location** , with optional holidays and a bulk import, so offices in Bengaluru and Gurugram can follow their own state holiday lists. HR can also ask Kili to set up a leave type or add a holiday; Kili proposes the change and HR confirms.

| Setting | Where | Example |
| --- | --- | --- |
| Paid or unpaid | Leave type | Loss of pay is unpaid |
| Half days | Leave type | Casual leave in half days |
| Can go negative | Leave type | Allow up to the year's credit |
| Encashable | Leave type | Earned leave paid out at exit |
| Max days at a time, notice days | Leave type | Up to 3 casual days, 7 days' notice for earned leave |
| Days per year, upfront or monthly | Leave profile | 18 earned days credited 1.5 a month |
| Carry forward cap and expiry, or lapse | Leave profile | Carry up to 30 days; casual leave lapses |
| Pro rata for mid-year joiners | Leave profile | August joiner gets 5/12 of the year |
| Holidays by location, optional holidays | Settings | Karnataka list for Bengaluru |

## Common leave types in Indian companies

Most Indian leave policies use the same handful of leave types. Names vary (earned leave is often called privilege leave), but the rules a leave management system has to handle are similar. The law sets minimums for some of them; the rest are company policy.

**Earned or privilege leave** is the main annual leave, earned through the year and usually carried forward and encashable. **Casual leave** covers short, unplanned absences, often in half days, and usually lapses at year end. **Sick leave** may need a medical certificate after a few days. **Comp-off** is credited for work on a holiday or weekly off, often with an expiry. **Loss of pay** is the unpaid type used when other balances run out, and it reduces salary for the month.

Companies also add **optional or restricted holidays** , where employees pick a set number from a list, **bereavement leave** , **marriage leave** and **paternity leave** . None of these are fixed by national law for the private sector, so each is a policy choice.

| Leave type | Typical setup | Set by |
| --- | --- | --- |
| Earned or privilege leave | Accrues monthly, carries forward with a cap, encashable | OSH Code minimum where it applies; state law; policy |
| Casual leave | Credited upfront, half days, lapses at year end | State law or policy |
| Sick leave | Credited upfront, certificate after a set number of days | State law or policy |
| Maternity leave | Up to 26 weeks, paid | Code on Social Security |
| Comp-off | Credited by HR for holiday work, expires | Policy |
| Optional holidays | Pick a set number from a list | Policy |
| Loss of pay | Unpaid, can go negative, flows to payroll | Policy |

Sources · checked 6 November 2026

- [Ministry of Labour and Employment: Occupational Safety, Health and Working Conditions Code, 2020 (section 32, annual leave with wages)](https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf)
- [Ministry of Labour and Employment: FAQs on the OSH Code (Q18, the 180-day rule)](https://www.labour.gov.in/static/uploads/2026/01/fb8c6466d0d6a7ed581bcb2bee34694c.pdf)
- [Ministry of Labour and Employment: Code on Social Security, 2020 (section 60, maternity benefit)](https://www.labour.gov.in/static/uploads/2025/07/b0620548445580767b5c0d18c95c26f7.pdf)

## From leave to payroll: loss of pay and encashment

**Unpaid leave flows into payroll as loss of pay.** When a manager approves unpaid leave, the days reach that month's payroll run, which prorates the salary; fixed deductions such as professional tax are not prorated. Nothing is re-entered, and the payslip shows the result.

At exit, the full and final settlement suggests **leave encashment** from the employee's balance (days × monthly gross ÷ 30), alongside unpaid salary days, and HR can add or remove lines before marking it settled. Use the [leave encashment calculator](https://beoblo.ai/in/en/tools/leave-encashment-calculator/) to check the tax side: encashment at retirement or resignation is exempt up to **₹25 lakh** in a lifetime for non-government employees (since 1 April 2023), based on up to 30 days a year and the average salary of the last 10 months.

Leave reports show days taken, pending requests, LOP, leave by type and department, and the highest balances, with a CSV download. Important changes are written to an audit log: who did what, and when.

[See the Beoblo leave module](https://beoblo.ai/in/en/platform/leave/) [Attendance management system](https://beoblo.ai/in/en/attendance-management-system/) [Leave encashment calculator](https://beoblo.ai/in/en/tools/leave-encashment-calculator/)

Sources · checked 6 November 2026

- [Income Tax Department: Income-tax Act 2025, section 19 (table, serial numbers 13 and 14)](https://wm.incometaxindia.gov.in/web/guest/w/section-19-199)
- [Income Tax Department: Notification 31/2023, ₹25 lakh limit for leave encashment](https://wm.incometaxindia.gov.in/web/guest/w/notification-no.-31/2023-f.-no.-200/3/2023-ita-i-/-so-2276-e-)

## Annual leave under the OSH Code

The four labour codes came into force on 21 November 2025. For establishments the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code) covers, **section 32** sets annual leave with wages. A worker who has worked **180 days or more** in a calendar year earns **one day of leave for every 20 days worked** ; adolescent workers and workers below ground in mines earn one day for every 15 days. Days of layoff, maternity leave and annual leave count towards the 180 days but do not themselves earn leave.

Someone who joins after 1 January qualifies if they work a quarter of the days left in the year. Holidays that fall inside a leave period are not counted as leave. Unused leave carries forward to the next year up to **30 days** ; leave the employer refused carries forward without limit. The worker can ask to **encash leave at the end of the calendar year** , and to encash leave above the 30-day carry forward.

When a worker is discharged, dismissed or resigns, they are paid for their unused leave **within 2 working days** ; on retirement or death, within 2 months, even if they had not yet worked the days needed to take that leave.

Many offices and shops also follow their state's **Shops and Establishments Act** , whose leave rules, such as earned, casual and sick leave days and festival holidays, differ from state to state. A company's leave policy must meet whichever law applies to each location, and may always give more. This is why leave profiles and holiday lists by location matter for companies with offices in several states.

| Rule | What the Code says |
| --- | --- |
| Eligibility | 180 days or more worked in the calendar year |
| Rate | 1 day per 20 days worked (1 per 15 for adolescents and below-ground mine workers) |
| Mid-year joiners | Eligible after working a quarter of the remaining days in the year |
| Carry forward | Up to 30 days; refused leave without limit |
| Encashment | On demand at year end, and for leave above 30 days |
| At exit | Unused leave paid within 2 working days (2 months on retirement or death) |

Sources · checked 6 November 2026

- [Ministry of Labour and Employment: Occupational Safety, Health and Working Conditions Code, 2020 (section 32, annual leave with wages)](https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf)
- [Ministry of Labour and Employment: FAQs on the OSH Code (Q18, the 180-day rule)](https://www.labour.gov.in/static/uploads/2026/01/fb8c6466d0d6a7ed581bcb2bee34694c.pdf)

## Maternity leave under the Code on Social Security

Under **section 60 of the Code on Social Security, 2020** , which replaced the Maternity Benefit Act, a woman who has worked at least **80 days** for the employer in the 12 months before the expected delivery is entitled to maternity benefit for up to **26 weeks** , of which no more than 8 weeks may come before the delivery. A woman with two or more surviving children gets up to 12 weeks, no more than 6 of them before the delivery.

A woman who legally adopts a child under three months, and a commissioning mother, get 12 weeks from the day the child is handed over. Maternity benefit is paid at the average daily wage of the three months before the leave. Where the work allows, the employer and employee can agree on work from home after the leave.

In Beoblo, maternity leave is a leave type like any other: set it as paid, with no notice days and the number of days your policy allows. There is no statutory paternity leave for the private sector in India; companies that offer it set it up as its own leave type.

Sources · checked 6 November 2026

- [Ministry of Labour and Employment: Code on Social Security, 2020 (section 60, maternity benefit)](https://www.labour.gov.in/static/uploads/2025/07/b0620548445580767b5c0d18c95c26f7.pdf)

## Worked example: setting up earned leave

A company gives **18 days of earned leave a year** , credited monthly, carried forward up to 30 days, encashable at exit. In Beoblo, HR creates an "Earned leave" type (paid, half days allowed, needs approval, encashable, 7 days' notice) and an "Office staff" profile (18 days a year, monthly accrual, carry forward capped at 30 days, pro rata for joiners).

Each month, every employee on the profile is credited 1.5 days. An employee who joins in August gets 5 months of credit in the first year, 7.5 days. At year end, the year-end run shows a preview: an employee with 34 unused days carries forward 30 and the other 4 lapse (or are paid out, if the policy says so). If the same employee leaves with 12 days unused, the full and final settlement suggests 12 days' encashment at monthly gross ÷ 30.

Check the policy against the law for each location. For establishments under the OSH Code, a worker with 180 days or more earns at least one day per 20 days worked: 12 days for 240 days worked. A policy of 18 days a year gives more than that, which the law allows.

Sources · checked 6 November 2026

- [Ministry of Labour and Employment: Occupational Safety, Health and Working Conditions Code, 2020 (section 32, annual leave with wages)](https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf)
- [Ministry of Labour and Employment: FAQs on the OSH Code (Q18, the 180-day rule)](https://www.labour.gov.in/static/uploads/2026/01/fb8c6466d0d6a7ed581bcb2bee34694c.pdf)

## How to choose a leave management system

**Policy coverage.** Can it hold every rule in your handbook: accrual upfront or monthly, carry forward caps with expiry, lapse, half days, negative balances, notice days, maximum days at a time, pro rata for joiners? Ask the vendor to set up your hardest leave type in the demo.

**Locations.** Can different groups follow different profiles, and can holidays differ by state? Companies across states need both.

**Payroll link.** Does approved unpaid leave reach payroll as loss of pay without export and import? Does the exit settlement pick up the leave balance?

**Approvals.** Does the manager see the balance impact and the team calendar before approving? Can HR apply on behalf, adjust balances and see a history of every change?

**Year end.** Is there a year-end run with a preview, or does someone rebuild balances in a spreadsheet each year?

**Migration.** Can you load opening balances from your current system?

**Reporting.** Can you see days taken, LOP and the highest balances by department, and download them?

[See Beoblo pricing](https://beoblo.ai/in/en/pricing/) [Compare HR software in India](https://beoblo.ai/in/en/best-hr-software-india/)

General information, not legal advice. Leave rules depend on your state and the type of establishment; check the law that applies to you. If anything here is out of date, write to team@beoblo.ai

Questions

## Frequently asked questions

Short answers on leave management and the leave rules for Indian employers.

### What is a leave management system?

Software that keeps every employee's leave balances, applies the company's leave policy (accrual, carry forward, lapse, half days), routes leave requests to managers for approval, shows a team calendar and passes approved unpaid leave to payroll as loss of pay.

### How many days of annual leave are workers entitled to in India?

For establishments under the OSH Code, 2020, a worker who has worked 180 days or more in a calendar year earns one day of leave for every 20 days worked (section 32). Offices and shops may also follow their state Shops and Establishments Act, which sets its own earned, casual and sick leave.

### How much leave can be carried forward under the new labour codes?

Up to 30 days under section 32 of the OSH Code. Leave the employer refused can be carried forward without limit, and the worker can encash leave above 30 days.

### When must unused leave be paid when an employee leaves?

Under the OSH Code, within 2 working days of discharge, dismissal or resignation, and within 2 months of retirement or death.

### How long is maternity leave in India?

Up to 26 weeks, no more than 8 before delivery, for a woman who has worked 80 days in the previous 12 months; 12 weeks for a woman with two or more surviving children; 12 weeks for adoption of a child under three months (Code on Social Security, section 60).

### How does leave connect to payroll in Beoblo?

Approved unpaid leave flows into the month's payroll run as loss of pay, which prorates the salary. At exit, the full and final settlement suggests leave encashment from the remaining balance.

### Can Beoblo handle different leave rules for different offices?

Yes. Leave profiles set days per year, accrual, carry forward and proration for each group, and holidays are set per location, with optional holidays.

### Can employees check their leave balance without asking HR?

Yes. Each employee sees their balance per leave type, used and pending days and their balance history, and can ask Kili "what's my leave balance?".

### Can we move our current leave balances into Beoblo?

Yes. HR can enter opening balances and adjust them with a reason, and employees can be imported by CSV, up to 500 rows at a time.

### Is leave encashment taxable?

Encashment while in service is taxable. Encashment at retirement or resignation is exempt for non-government employees up to ₹25 lakh in a lifetime, worked out on up to 30 days a year of service and the average salary of the last 10 months.