Absence account

28 Jul 2025

Mareike

  1. Absence Account: What it is and How it is Calculated

  2. What is an Absence Account?

  3. Evaluation of the Absence Account

  4. Calculation of the Absence Account

  5. Example of the Calculation of the Absence Account

  6. Digital Solutions for a Transparent Absence Account

  7. Conclusion


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<6 Pillars of Employee Retention

Absence Account: What It Is and How It Is Calculated

An absence account is an essential tool in human resources to manage holiday entitlements, sick days, and other absences transparently and understandably. However, discrepancies often arise, especially regarding the calculation of remaining holiday and carryover from the previous year. The problem often lies in the underlying counting rule, which determines whether and when unused holiday time expires. In this article, we will explore what an absence account is, how it is evaluated, and how the calculation works.


What is an absence account?

An absence account documents the number of days an employee has not worked or will not work for various reasons. It includes, among other things:

  • Holiday entitlements (statutory and contractual holiday)

  • Outstanding leave from the previous year

  • Sickness-related absences

  • Special leave and exemptions

  • Expiry regulations for unused holiday

A digital absence management system, such as that offered by Sundae OS, helps to automatically capture and accurately present this information.

Evaluation of the Absence Account

In practice, there are often ambiguities when the actual remaining leave does not match employees' expectations. The reasons for this are usually:

  1. Expiry of remaining leave:

    • Legally or company policy may stipulate that unused leave expires on 31 March of the following year.

    • If a portion of the leave is taken before this deadline, only the unused portion remains.

  2. Entry in the current year:

    • Those who join the company during the year receive their annual leave proportionally based on the full months worked.

    • Example: If an employee starts on 20 February, February is often not fully counted.

  3. Special cases and corrections:

    • Sometimes negative leave balances occur when too many days were carried over from the previous year or a specific expiry rule applies.

Calculation of the Absence Account

The calculation of the absence account is based on fixed rules derived from legal requirements and operational agreements. The most important factors are:

1. Expiry Regulations for Remaining Leave

  • Legally: Remaining leave must generally be taken by 31 March of the following year, unless the employee was unable to take it for operational or health reasons.

  • Operationally: Some companies allow transfer without an expiry date, especially for long-serving employees.

2. Holiday Entitlement upon Entry in the Current Year

  • The entitlement is calculated proportionately:

    • Annual leave ÷ 12 months × months worked

  • Fractions are rounded up or down depending on the regulation.

3. Negative Leave Balances

  • Arise when more leave is taken than is actually entitled.

  • Common cause: Remaining leave expires before it is taken.

4. Calculation for Severely Disabled & Special Cases

  • Employees with a severe disability often have the right to additional leave days.

  • Special regulations for certain professional groups (e.g. shift work) may require a deviating calculation.

Example of the Calculation of the Absence Account

Three employees have different conditions regarding their holiday entitlement:

Person


Unused Holiday from Previous Year

Annual Entitlement

Holidays Taken


Remaining Holiday

Remark

D

8

30

26

4

Remaining holiday expires on 31st March.

E

0

28

20

8

Entry on 20th February, pro-rata entitlement

F

12

32

45

-1

Remaining holiday from previous year partially expired

Explanation of the Calculation:

  • Employee D: The remaining holiday from the previous year was carried over with 8 days, but only 4 days taken by the cut-off date of 31st March. The remaining 4 days expire, leaving a balance of 4 days with the regular annual entitlement of 30 days.

  • Employee E: The entry was on 20th February, so the holiday entitlement was calculated pro-rata:

    • 28 holiday days / 12 months = 2.33 days per month

    • 2.33 x 10.5 months = 24.5 days, rounded down to 24 days

    • Of the 24 days, 20 were taken, leaving a balance of 8 days.

  • Employee F: Had 12 days of remaining holiday from the previous year, of which 5 days expire on 31st March. As a result, a total of 45 holiday days were taken, leading to a negative balance of -1 day.

Digital Solutions for a Transparent Absence Account

Modern HR software solutions like Sundae OS simplify absence management by:

  • Automatically calculating vacation entitlements and establishing expiration rules

  • Digitally managing requests for holiday and sickness

  • Enabling live evaluations of remaining holiday and absences

  • Ensuring error minimisation through clear calculation rules

The use of a digital absence account not only minimises administrative effort but also creates greater transparency for employees and managers.

Conclusion

The absence account is an important part of personnel management to accurately record holidays, sick days and other absences. Frequent misunderstandings arise from expiration regulations, proportional calculations when joining during the year, or unclear counting rules.

A digital solution like Sundae OS can manage absences efficiently, enable transparent calculations, and thus increase planning security for companies and employees.

Companies should clearly communicate their holiday regulations and store them in a digital system to avoid uncertainties.