SmoothPay supports both negative leave balances and capped balances, depending on the leave type, jurisdiction settings, and your organisation’s policies.
This article explains:
When negative balances occur
How different jurisdictions interpret negative balances
How maximum leave caps work
How to manage and monitor balances effectively
Negative Leave Balances
A negative anniversary balance can appear when:
An employee uses leave in advance of their entitlement
Leave is taken from the current year's pro-rated portion before the anniversary
More leave has been used than legally earned (depending on jurisdiction)
Whether negative balances are permitted depends on:
Your jurisdiction’s legislation
Your organisation’s leave policy
Employment agreement terms
The leave type classification
SmoothPay does not itself restrict negative balances unless local legislation explicitly prohibits them.
How to interpret negative balances
The meaning of a negative balance varies by jurisdiction:
In some jurisdictions:
A negative anniversary balance simply means:
The employee has used part or all of their current year’s entitlement early
They have not exceeded their total annual entitlement
No repayment on termination is required unless they truly exceeded the total accrual for the year
In other jurisdictions:
A negative balance may mean:
The employee has used more leave than legally earned
The employer may lawfully recover over-used leave on termination
Additional reporting or disclosure may be required
Always check:
Local legislation
Employment agreements
Any company policies that restrict advance leave
Maximum Leave Balances (Caps)
Some leave types allow a maximum balance to be set. This is known as a cap.
Caps are used to:
Prevent unlimited accumulation
Encourage employees to take leave regularly
Meet legislative or policy obligations
Control organisational leave liability
When a cap is reached, the system behaviour depends on the leave type configuration:
Accrual may be paused
Excess leave may be forfeited
Excess leave may be paid out
The to-date balance may display the capped amount
SmoothPay’s behaviour matches the rules defined in the leave code’s configuration.
Where Caps Are Configured
To configure a cap:
Go to the Codes screen
Select the Leave codes category
Select the relevant leave type
Click the edit button
Set the Capped at field
Click Save
The cap may apply to:
The anniversary balance
The to-date balance
This depends on the leave type’s classification and accrual method.
Monitoring Leave Balances
Regular monitoring helps identify:
Employees with negative balances
Employees approaching a cap
Potential compliance issues
Unusual leave usage patterns
Accrual inconsistencies
Useful tools:
Right-click → Leave balances (Staff or Payrun screens)
Reports → Staff → Leave entitlements
Reports → Staff → Leave valuation
Leave taken analysis reports
Payslips (if balances are configured to display)
Best Practice Recommendations
Review leave balances regularly
Encourage staff to take leave proactively
Set caps only where appropriate and legally allowed
Avoid routinely allowing large negative balances
Use manual adjustments sparingly and with clear documentation
Audit leave records during onboarding or migration