Adjusting a leave balance should only be done when you fully understand how that leave type works and how its balances are calculated.
When an adjustment is needed
There are several situations where a leave balance must be manually corrected:
Wrong leave type was used
If the incorrect leave type has been used during payroll:
Increase the balance for the incorrect leave type
Reduce the balance for the correct leave type
Example:
Sick leave was entered instead of annual leave.
You must:
Increase the Sick Leave balance
Reduce the Annual Leave balance, in proportion to the value paid
Employee was paid, but leave was not recorded
If the employee received pay for time they were absent, but the leave was never recorded:
Deduct the amount of actual leave taken from the correct leave type
Example:
Employee worked 4 days and was paid a full week, but should have had 1 day of annual leave recorded.
You must reduce the Annual Leave balance accordingly.
Migrating employee records into SmoothPay
When taking on an employee who already has existing entitlements:
Establish opening “take-on” leave balances for each leave type
Ensure values align with the previous payroll system
This ensures continuity and correct calculation going forward.
Historic incorrect processing
If balances are wrong because leave was processed incorrectly over a long period:
Carefully calculate what the balance should be “as at today”
Adjust the balance up or down accordingly
Review historical pays if needed to confirm entitlement
Incorrect historic handling usually requires proportionate adjustments.
Other important considerations
Always adjust balances in proportion to the dollar value
This is critical in jurisdictions where leave is valued using averages or additional calculation rules (for example, New Zealand).
You cannot simply adjust the raw units — the adjustment must reflect what the employee was actually paid or should have been paid.
Examples
Example 1: Wrong leave type used
Employee was paid:
1 day sick leave = $200
Correct leave value:
Annual leave = $1,200 per week = $240 per day (0.2 weeks)
But only $200 was paid.
Correct adjustment is:
$200 ÷ $1200 = 0.167 weeks
So the annual leave balance should be reduced by 0.167 weeks, not 0.2 weeks.
Example 2: Employee was paid but leave not recorded
Employee was paid:
$1,000 for the week
Annual leave valuation:
$1,200 per week
Correct adjustment:
$1,000 ÷ $1,200 = 0.833 weeks
So you should only deduct 0.833 weeks from the annual leave balance, not the full 1 week.
Need help?
If you are unsure whether a leave balance should be adjusted, or how to calculate the correct proportional value, please contact Support for assistance.