---
title: How Leave Forfeiting Works in HRSimplified
description: "![](https://hrsimplified.org/wp-content/uploads/2026/02/image-6-1024x576.png) ## Why This Matters At HRSimplified, we believe businesses should spend less time worrying about admin and more time focusing on their people. Managing leave effectively is a big part of that. Annual leave forfeiting helps you: - Control…"
url: "https://hrsimplified.org/docs/how-leave-forfeiting-works-in-hrsimplified/"
updated: "2026-04-20"
category: Leave Management
---

# How Leave Forfeiting Works in HRSimplified

![](https://hrsimplified.org/wp-content/uploads/2026/02/image-6-1024x576.png)

## Why This Matters

At HRSimplified, we believe businesses should spend less time worrying about admin and more time focusing on their people. Managing leave effectively is a big part of that.

Annual leave forfeiting helps you:

- Control leave liability
- Encourage employees to take time off
- Stay aligned with company policy and labour practices
- Avoid excessive leave accumulation

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## Where to Configure Leave Forfeiting

To access the leave forfeiting settings:

👉 **Settings → Leave**

Scroll to **Leave Rules and System Behaviour**

You will find:

- **Annual Leave Forfeit (On/Off)**
- **Annual Leave Forfeit Type**
- **Annual Leave Forfeit Period**

> ⚠️ These are **company-level settings** and apply to all employees.

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## How Leave Forfeiting Works

### 1. Annual Leave Forfeit (On/Off)

**OFF:**

- Employees can accumulate unlimited annual leave
- No automatic balance reduction occurs

**ON:**

- The system enforces a maximum leave accumulation limit
- Any excess leave is automatically reduced

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### 2. Annual Leave Forfeit Type

Choose how the leave cycle is calculated:

#### Option A: Company Set Date

- Uses a single leave cycle for all employees
- Typically aligned with:
  - Financial year-end
  - Calendar year
- Best for consistency and simpler administration

#### Option B: Employee Anniversary

- Each employee has their own leave cycle
- Based on their start date
- More personalised, but slightly more complex to manage

#### ⚠️ Note:

If forfeiting is enabled, selecting a “no forfeiting” type is not applicable in the current UI.

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### 3. Annual Leave Forfeit Period

Defines how long leave can accumulate before forfeiture applies.

- Maximum: **18 months**

**Examples:**

- **12 months** → Max = 1 year’s leave
- **18 months** → Max = 1.5 years’ leave

The system calculates the cap based on:

- Employee leave entitlement
- Selected forfeiture type

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### 4. Automatic Monthly Processing

When enabled:

- The system runs a check **monthly**
- If an employee exceeds the allowed leave balance:
  - The excess leave is automatically forfeited

This ensures continuous control of leave liability without manual intervention.

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## Important Notes

- Applies **only to Annual Leave**
- Configured at **company level**
- Works automatically once enabled
- Maximum forfeiture period is **18 months**
- If disabled, leave accumulates without restriction
- Employers must ensure compliance with local labour laws

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## Recommended Best Practice

Before enabling forfeiture:

✔ Clearly define your leave policy
✔ Choose between Company Cycle or Employee Anniversary
✔ Communicate the policy to employees
✔ Ensure employees have a fair opportunity to take leave

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## Summary

Annual leave forfeiting in HRSimplified gives you a structured, automated way to manage leave balances across your organisation.

By setting clear limits and letting the system handle enforcement, you reduce admin, improve compliance, and create a healthier work environment for your team.