# Cloud Payroll - What is ‘Limit’ and ‘Entitlement Calculation Method’ in ‘Leave Type’?

Question : What is ‘Limit’ and ‘Entitlement Calculation Method’ in ‘Leave Type’?

What is Limit?

Limit is essentially used to determine how the balance of the leave would be controlled and displayed, there are 3 types of Limits:

1) Unlimited : Unlimited is usually used for Unpaid Leaves where it will allow users to apply for unpaid leave as many times as they like without having their balance affected.

2) Limited without Advance Leave : Limited without Advance Leave is commonly used by a few types of leave such as Medical Leaves, Annual Leaves, and such.
The main purpose of Limited without Advance Leave is to tell the system to block the user from applying the specific leave type once their balance has fallen into 0, in other words, the balance will never go below 0.

3) Limited with Advance Leave : Limited with Advance Leave can also be used by Medical Leaves and Annual Leaves.
The main purpose of Limited with Advance Leave is different from Limited without Advance Leave, that is to allow the balance to go below 0, meaning the balance can become negative if they proceed to apply even after their balance is 0.
Once it has gone to negative, the only way to recover it back is to do Leave Entry or wait for their entitlement to slowly recover back by monthly basis / wait till next year new entitlement.

What is Entitlement Calculation Method?
To put it in simple terms, Entitlement Calculation Method is used to determine how the leave entitlement should be calculated.
There are total 6 Entitlement Calculation Method:

1) Yearly Leave by Employee’s Join / Confirm Date :
This Entitlement Calculation Method first calculate what is the yearly entitlement of the staff and prorates it in a more detail matter which is by their Join / Confirm Date.
Once it has been pro-rated, the leave balance amount will be provided in yearly lump sum rather than month by month.

2) Yearly Leave by Calendar Year :
This Entitlement Calculation Method does not prorate the yearly leave entitlement of the staff as it calculates based on the calendar year.
The amount will be provided in one year lump sum rather than month by month as well.

3) Earn Leave by Employee’s Join / Confirm Date :
The main objective of this leave is to ensure that staff must have WORKed to earn the leave from the completed month(s).
They will NOT have any entitlement in the first month of every year as they have not worked for it, in order for them to get January’s leave entitlement, they would have to wait till February, in order for them to get February leave entitlement, they would have to wait till March and so forth.
This leave also has a prorate feature where it will prorate the leave accordingly based on the employee’s join / confirm date and will be provided in a monthly basis.

WARNING : User / Company should expect staff to not receive 1 month leave entitlement if they select Earn Leave Calculation Method as they are uanble to get December’s leave; In November, they will get October’s Leave, In December, they will get November’s Leave but in January, they will NOT receive December’s leave entitlement as it is already a new year.

4) Earn Leave by Calendar Year
Similar to Earn Leave by Employee’s Join / Confirm Date, the only difference for this is that, it does not prorate based on the employee’s join / confirm date but will still be provided on a monthly basis.

WARNING : User / Company should expect staff to not receive 1 month leave entitlement if they select Earn Leave Calculation Method as they are uanble to get December’s leave; In November, they will get October’s Leave, In December, they will get November’s Leave but in January, they will NOT receive December’s leave entitlement as it is already a new year.

5) Advance Earn Leave by Employee’s Join / Confirm Date
Earn Leave is where the staff HAS TO WORK for their monthly entitlement, Advance Earn Leave is where they will get their entitlement as soon as a new month arrives.
Similar to earn leave, it will be prorated and be provided on a monthly basis.
The only difference is that it will be provided on the first month of the year as employees’ DO NOT have to complete the month for their leave entitlement.

6) Advance Earn Leave by Calendar Year
Similar to Advance Earn Leave by Employee’s Join / Confirm Date, the only difference is that it will be prorated by the Calendar Year. Other than that, the functionality and main purpose remains.
Leave Entitlement will still be provided on every new month and will be provided on monthly basis.

By WaiKit 231221, Azirah 231221, P231221