Annual leave is a cherished benefit for employees, offering them time to relax, rejuvenate, and, for expatriates, visit their home countries. Recognizing the importance of this time off, many companies in GCC countries provide additional perks such as air tickets and leave advances. This article explores how Keka HR's new feature for managing leave advances can significantly enhance employee satisfaction and streamline administrative processes.
Table of Contents
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What is Leave Advance?
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Setting up a leave type to be eligible for the leave advance policy.
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Creating and Saving a New Leave Advance Policy
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How can employees request an advance on their annual leave?
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Approving the leave advance encashment
What is Leave Advance?
Leave advance is a policy where employees can request an advance on their salary for the duration of their annual leave. This advance can cover the entire leave period or a portion of it, allowing employees to manage their finances better while they are away.
For example, if an employee is on leave from April 8th to May 7th, they can request an advance for this period and also claim a partial salary from April 1st to April 8th.
You can configure leave advance policies under the payroll settings, similar to leave encashment policies. This includes setting a default policy and per-day calculations.
Setting up a leave type to be eligible for the leave advance policy.
Specify which leave types are eligible for the leave advance policy by selecting this option in the additional restrictions section of the leave setup. Not all leave types you create will qualify for the advance leave policy.
On this page, you can enable the option for employees to request an advance salary when applying for leave. You can then choose whether the advance is for the entire leave duration or for both the leave period and part of the month.
Creating and Saving a New Leave Advance Policy
Navigate to the Payroll (1) option in the menu bar and then click on the Settings (2) tab within the Payroll section. Select the Leave Advance (3) tab in the Payroll Settings.
Click on the + Leave Advance Policy button to add a new leave advance policy.
Enter the policy name (1) in the designated field and specify the calculation formula (2) for the daily rate. This formula determines the value of annual leave per day and can be based on existing salary components (3).
Click the Save button in the modal to save the leave advance policy.
How can employees request an advance on their annual leave?
When employees request a leave that qualifies for advance annual leave, they will have the option to request a salary advance for the leave period. Once they select this option, they can choose whether they are requesting an advance for the entire leave duration or for a partial leave period with a partial salary.
Approving the leave advance encashment
When employees apply for a leave type with leave advance enabled, they will see an option to request an advance. This request is only triggered once the leave request is approved.
Employees can choose to request an advance for the entire leave duration or include a partial salary.
As payroll admin or financial head its upto you to finally approve the leave advance encashment request. To do so navigate to the Payroll (1) option in the menu bar and then click on the Approval (2) tab within the Payroll section. Select the Leave advance (3) tab in the Payroll Settings.
Within the pending approvals tab, you will find pending leave advance requests awaiting approval. Here, you can select individual requests or multiple requests and proceed by clicking on the Take Action button.
In the following screen, you will find detailed information regarding the leave, including details of the leave request (1) and payment. Here, you can choose whether the leave advance is for the leave duration and part salary or solely for the leave period (2).
Part month is the days preceding the leave duration within the month in which leave is availed and salary paid for this period is called as part salary.
Choose the leave advance policy (1) that applies to this request. Below, you will see the amount being paid out. Hover (2) over it to view the calculation and formula provided for the leave advance policy.
Next, choose the payment mode and select either the upcoming payroll cycle or the next one. Then, simply click on approve or reject to finalize the process.
After approval, the request will be moved to the pending payment tab, where you can either reject the request or update payment details as needed.
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After the payment is processed the request will be moved to past requests.
After the leave advance is approved and processed via payroll. Employees can view the advance annual leave payment in their payslip.
Keka HR's leave advance feature is a thoughtful addition that addresses a common need among employees in the GCC region. By offering this benefit, you can enhance your employee value proposition, ensuring happier, more loyal employees.