Calendar, financial or anniversary year
Whatever is chosen, use one leave year for all leave types unless there is a clear reason not to. Mixed years, such as earned leave on the calendar year but sick leave on the financial year, confuse employees and make year-end processing error-prone.
- Calendar year, 1 January to 31 December, which matches the OSH Code's count of days worked in a calendar year
- Financial year, 1 April to 31 March, chosen by companies that plan budgets on the accounting year
- Anniversary year, running from each employee's joining date, fair but harder to administer
Why the leave year matters
The leave year decides when casual leave lapses, when earned leave is carried forward and capped, when quotas reset, and how joiners and leavers get pro rata leave. For workers, the OSH Code counts annual leave on days worked in a calendar year: workers who put in 180 days of work in a calendar year earn a day of paid leave for each 20 days worked. A company that runs a financial leave year still has to make sure that entitlement is met. See the annual leave rules.
Changing the leave year
Moving from a financial to a calendar leave year, or the other way, needs a transition. The company usually runs one short leave year of nine or fifteen months, gives pro rata quotas for that period, and announces it well in advance. Balances are carried over carefully so that nobody loses leave in the switch.
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What is the leave year in India?
There is no single leave year for all employers. Companies choose the calendar year, January to December, or the financial year, April to March, and some use each employee's joining anniversary. Under the OSH Code, workers' annual leave is counted on days worked in a calendar year. Your leave policy should state which leave year applies.
When does casual leave reset?
Casual leave usually resets at the start of each leave year: 1 January on a calendar leave year, or 1 April on a financial leave year. Unused casual leave normally lapses at the end of the leave year, and the new year's quota is credited at once or month by month, as the policy says.