Earned Leave Carry Forward at Year End: See Who Carries and Who Lapses Before the Leave Year Closes
In short
Set one year-end rule for each leave type, then check every staff member's days carried forward and lapsed before the leave year closes, not after.
- The Labour Ministry's FAQ says a worker can carry forward up to 30 days of leave to the next calendar year (checked on 13 October 2026).
- Casual and sick leave usually lapse at year end; earned leave usually carries forward. Your policy and your state's Shops and Establishments Act decide the details.
- In Shiftelio, Close the leave year shows every person's days left now, carry forward, lapse and what they start next year with, before the year closes.
To handle earned leave carry forward at the end of the leave year, set one rule for each leave type (carry forward all, carry forward up to a set number of days, or let unused days lapse), then check every person's numbers before the year closes. The rule takes five minutes. The check is what saves you the argument in January, when your cook asks where his 8 days of earned leave went.
Most small Indian businesses still close the year in a leave register or an Excel sheet. Somebody adds up what is left, guesses which days carry and which lapse, and the first time a staff member sees the result is when they ask for leave in the new year.
Earned leave, casual leave and sick leave do not end the year the same way
Most Indian leave policies have three buckets, and owners mix them up at year end more than at any other time:
- Earned leave (also called privilege leave, EL or PL) is the leave a person builds up by working. It is the one that normally carries forward into the next year, up to a limit.
- Casual leave (CL) is for short, unplanned needs. Most policies let unused casual leave lapse on the last day of the leave year.
- Sick leave (SL) depends on your policy and your state. Some businesses let it lapse, some let a few days carry.
So the year-end question is not one question. It is one question per leave type, and the answer has to be applied the same way to every person who has that leave type. That is where a register falls apart: the rule is in the owner's head, and the arithmetic is done fourteen times by hand.
What India's Labour Codes say about carrying leave forward
The four Labour Codes came into force on 21 November 2025, and annual leave with wages now sits in the Occupational Safety, Health and Working Conditions Code, 2020. The Ministry of Labour and Employment's Additional FAQs on Labour Codes (as on 16 March 2026, checked on 13 October 2026) answers the carry-forward question directly:
- Up to 30 days carry forward. The FAQ says a worker can carry forward up to 30 days of leave to the succeeding calendar year.
- Leave applied for and refused is different. The same answer says leave a worker applied for and was not granted can be carried forward without that limit, and leave above 30 days that was applied for but not granted can be encashed at the end of the calendar year.
- A better state rule still applies. The FAQ says an employee is entitled to the benefit under a state law where it is more favourable than the Code. Several state Shops and Establishments Acts allow more than 30 days to accumulate.
We went through the rest of the Code's leave chapter, including the 180-day eligibility test and encashment, in our guide to leave rules under the Labour Codes. The Ministry's Labour Codes page carries the Codes themselves.
What this means for the year-end screen: for earned leave, a rule of Carry forward up to 30 days matches the Code's figure, unless your state Act or your own policy gives more. For casual leave, Unused days lapse is what most policies already say.
This is general information, not legal advice: check with your state labour department or an employment lawyer for your case.
Choose one rule for each leave type
Every leave type in Shiftelio carries its own year-end rule. There are three:
| Rule | What happens to unused days | Typical use |
|---|---|---|
| Carry forward all | Every unused day moves into the next leave year | A generous earned leave policy, or a type you count down over several years |
| Carry forward up to | Days up to your number move; the rest lapse | Earned leave, with your limit (30 under the Code, more if your state Act allows) |
| Unused days lapse | Nothing moves; the next year starts fresh | Casual leave, and sick leave in many policies |
You set the rule on the leave type in Leave settings, or straight from the year-end screen under Year-end rules. One rule per leave type means one rule for everybody on it: you never do the sum person by person.
Check every person before the year closes
Shiftelio is a staff attendance, shift and leave app for small businesses. Its year-end screen is called Close the leave year. Open Leaves, then Leave settings, and on the Leave year card tap See the year-end preview. Near the end of the year the same link shows up on the Leaves home as See preview. You can open it any time; it is most useful in the last 15 days of the leave year.
At the top you see how many People, how many days Carry forward, how many days Lapse, and the date the New year opens. A big Lapse number is your early warning.
The list switches from Everyone to only the people who will lose something. For each person and each leave type it shows Left now, Carry forward, Lapse and what they start next year with.
Under Year-end rules, tap Change a rule and pick Carry forward all, Carry forward up to (with the most days that carry forward), or Unused days lapse. The totals change as you choose, and nothing is saved until you press Save rules.
You now have a list of names and days. A message in the second week of December ("you have 4 casual leave days that will lapse, book them before the 31st") is worth far more than an explanation in January.
It marks the preview as reviewed, with the date. You can still change a rule until the year closes.
On its date the new leave year opens on its own with those numbers. Nobody has to remember to do anything on the night of 31 December.
If something was wrong
For 7 days after the close, Undo year-end reverses the carry forward, the lapse and the new days. It cannot be undone once someone has already used leave from the new year, and it never touches leave already taken or paid. After that, fix a single person's number with Adjust on their balance.
Your leave year does not have to be January to December
Many Indian businesses run leave from April to March, alongside the financial year. Under When does your leave year start? in Leave settings you pick the month. If you change it, Shiftelio shows who moves before anything changes, and for each person you choose Carry over what is left or Start again with this year's days. Days already taken never move.
A worked example: a 14-person restaurant in Pune
Say a restaurant in Pune has 14 staff and a January to December leave year. The owner's policy gives earned leave, casual leave and sick leave, and the rules are set once:
- Earned leave: Carry forward up to 30 days.
- Casual leave: Unused days lapse.
- Sick leave: Unused days lapse.
On 15 December the owner opens Close the leave year and taps Only people losing days. Two names come up:
- Arjun, a waiter, has 4 casual leave days left. All 4 will lapse.
- Meena, a cook, has 12 earned leave days left, which all carry forward, and 3 casual leave days, which lapse.
Nobody's earned leave is above 30 days, so no earned leave lapses at all. The owner tells Arjun and Meena that day. Arjun takes two of his days over Christmas; Meena keeps hers. On 1 January the new year opens on its own, and Meena's 12 earned leave days are already in her 2027 balance.
Without the preview the owner would have found out about Arjun's 4 days the same way most owners do: when Arjun asked for them in January.
Which app shows earned leave carry forward per person before the year ends?
What is different from a register or a spreadsheet is the order of events: you see each person's carry forward and lapse before the leave year closes, while there is still time to tell them.
Questions owners ask
Can earned leave be carried forward to the next year in India?
Yes. The Labour Ministry's FAQ on the Labour Codes says a worker can carry forward up to 30 days of leave to the next calendar year, and a more favourable state law still applies. Your policy can be more generous than that.
Does casual leave lapse at the end of the year?
In most policies, yes. Casual leave is usually set to lapse at year end, and in Shiftelio that is the Unused days lapse rule on the casual leave type. Check your state's Shops and Establishments Act and your own policy.
What happens to earned leave above 30 days?
The Ministry's FAQ says leave above 30 days that a worker applied for and was refused can be encashed at the end of the calendar year. The Close the leave year preview shows how many days sit above your limit for each person, so you know before the year closes.
Does Shiftelio close the leave year automatically?
Yes. On its date the new leave year opens on its own with the numbers from the preview. For 7 days afterwards you can press Undo year-end, unless someone has already used leave from the new year.
Can I change the carry forward rule after seeing the preview?
Yes, until the year closes. Tap Change a rule, watch the totals change, then press Save rules. Nothing is saved before that.
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