Leave Policy Template for Indian Companies: All Leave Types

A leave policy is the master document for time off. It sets the leave year, lists every leave type the company offers, explains how leave is earned, applied for and approved, and covers situations such as leave during probation, leave during the notice period and unauthorised absence. Detailed rules for each leave type sit in separate policies, which this template refers to rather than repeats.

When to use it: Use it when you first set up leave, when you add or change a leave type, or when leave is being granted differently across branches. HR drafts it, finance checks the cost of the entitlements and management approves it. Share it with every new joiner along with the appointment letter.

Leave policy template

Copy the text below and replace everything in square brackets with your company details.

1. Purpose

This policy sets out the types of leave available to employees of [Company Name], how leave is earned and applied for, and the general rules that apply to every kind of leave.

2. Scope

It applies to all employees on the company's rolls. Where a leave type has its own policy, that policy holds the detailed rules and this policy provides the common framework.

3. Leave year and accrual

The leave year runs from [1 January to 31 December].
Leave is credited [monthly in arrears], and joiners and leavers receive leave in proportion to their service in the year.
Balances are rounded to the nearest half day.

4. Leave types

Casual leave: [Number] days a year for short, unplanned needs, under the Casual leave policy.
Sick leave: [Number] days a year for illness, under the Sick leave policy.
Earned leave: [Number] days a year, never less than the entitlement under applicable law, under the Earned leave policy.
Maternity, paternity and adoption leave: under their respective policies.
Bereavement and marriage leave: under their respective policies.
Leave without pay: when paid leave is exhausted, under the Leave without pay policy.
Comp off: for approved work on weekly offs and holidays, under the Comp off policy.

5. Applying for leave

Planned leave of more than [3] days is applied for at least [7] days in advance, and shorter planned leave at least [2] working days ahead.
For unplanned leave, the employee informs the manager by [10:00 am] on the day and applies within [2] working days of returning.
The reporting manager approves or rejects the application, after which HR approves it.
Except in an emergency, leave is not treated as granted until it is approved.

6. Rules common to all leave

Weekly offs and holidays inside or next to a leave spell are counted under the Sandwich leave policy.
Half-day leave may be taken for the first or second half of the day where the leave type allows it.
Balances cannot go below zero, except [casual leave, by up to 2 days].
Employees on probation may take [casual and sick leave as credited].
Leave during the notice period needs the manager's approval, and unapproved absence during notice is adjusted in the full and final settlement.

7. Cancellation and recall

An employee may cancel approved leave before it starts, and the days return to the balance. The company may recall an employee from leave only in a genuine emergency, and the unused days are credited back.

8. Unauthorised absence

Absence without approved leave is treated as leave without pay and may lead to action under the Attendance policy and the Disciplinary action policy.

9. Responsibilities

Employees: plan leave early, apply before it starts and keep the manager informed.
Managers: decide applications promptly, balance team cover fairly and never refuse leave without a reason.
HR: credit leave, keep leave records accurate and resolve balance queries.

10. Review

HR reviews leave entitlements and rules each year before the new leave year starts, and whenever applicable law or the state's leave rules change.

What to include

One master document

Keep the common rules in the leave policy and the details of each leave type in its own policy. Employees then find the general process in one place and the specific rules where they expect them.

Statutory floors

Annual leave with wages and maternity benefit have legal minimums. Write entitlements as not less than applicable law and check the leave entitlement rules under the OSH Code before fixing numbers.

Leave year and accrual

State when the leave year starts, whether leave is credited monthly or upfront, and how joiners and leavers are pro rated. Balance disputes often start with an unclear accrual rule.

Notice and approvers

Set notice periods for planned leave and a reporting deadline for unplanned leave, and name the approvers. Employees should know who can say yes and by when.

Probation and notice period

Say which leave is available during probation and how leave during the notice period is handled. These two stages produce many avoidable disputes at confirmation and exit.

Common mistakes to avoid

Listing leave entitlements in the appointment letter that differ from the leave policy.
Setting earned leave below the statutory minimum for workers covered by the OSH Code.
Letting managers approve leave on chat without it reaching the leave records.
Not defining the leave year, so carry forward and lapse dates are argued every January.
Packing every leave type's details into one long document that nobody reads.

Run it in ZeniaHR

ZeniaHR runs this policy through Leave Applications and the Leave Ledger. The default leave types CL, EL, SL and LWP accrue monthly with pro rata for joiners and leavers, rounded to half a day, and every balance change is a ledger entry. Leave rules per type cover balance, notice, back-dating, probation, half days and documents, and employees see a live preview of days charged before applying. Approvals go to the reporting manager and then HR, and the Leave Calendar shows team leave by month.

Leave management Policy settings Payroll

See it on your own data

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Frequently asked questions

What leaves are employees entitled to in India?

It depends on the law that covers the employee and on company policy. The OSH Code provides annual leave with wages and the Code on Social Security provides maternity benefit, while casual, sick and other leave usually comes from state Shops and Establishments rules, standing orders and the company's own policy. Check your state rules before fixing numbers.

What is the leave year in a leave policy?

The leave year is the 12-month period over which leave is credited, used, carried forward and lapsed. Companies commonly use the calendar year or the financial year. Because OSH Code eligibility for annual leave is counted by calendar year, a January to December leave year keeps earned leave easier to reconcile.

Can a manager reject a leave application?

Yes. Planned leave can be refused or moved for business reasons, such as year-end closing or another team member already on leave, but the refusal should be recorded with a reason and the employee helped to find other dates. Repeated refusals that leave earned leave unused cause problems at year end.

Is leave allowed during the notice period?

It depends on your policy. A common approach allows leave during notice only with the manager's approval, because handover comes first, and adjusts unapproved absence in the full and final settlement. State the rule clearly so exits do not turn into arguments about leave balances.