How Leave Types Affect Payroll

How Leave Types Affect Payroll

Each Leave Type (Annual, Sick, Emergency, Unpaid, etc. — configured under Attendance → Leave Types) has an Is Paid flag that determines what happens to pay when an employee is on that leave.

Paid Leave

Days covered by a paid leave type do not trigger an absence deduction — the employee is paid as if they worked, even though they're marked "On Leave" rather than "Present" in attendance records.

Unpaid Leave

Days covered by an unpaid leave type do reduce payroll — treated the same as an absence deduction for those days.

Why Approval Status Matters

Only an Approved leave request affects the attendance record and payroll calculation — a Pending request has no effect yet, and a request left pending through payroll calculation will show those days as a normal absence until it's approved. Always clear pending leave requests before calculating a payroll period that covers those dates.

Where to Review

• Attendance → Leaves — approve/reject requests, see leave balance per employee
• HR → Leave Utilization — a company-wide view of who's used how much of their leave balance
• Payroll → Periods → Records — the final effect on each employee's pay for that period