While the exact leave rules depend on the jurisdiction SmoothPay is configured for, the vast majority share a set of uniform concepts that define how balances are calculated and maintained.
Anniversary balance
SmoothPay uses an internal calculation model called the anniversary balance for the majority of leave types across supported jurisdictions.
The anniversary balance represents the amount of leave remaining from completed years of service. It’s the foundation of most leave calculations and determines how much entitlement is available from prior completed years, excluding any pro-rated component.
The calculation is:
(Completed years of service × Accrual rate) − Leave taken to-date = Anniversary balance
The anniversary balance behaves as follows:
It increases by the accrual rate at each completed year of service.
It decreases whenever leave is used.
It does not increase per pay period:
it only changes on completion of a full year,
or when leave is taken.
The balance can exist in one of three states:
State | Meaning |
Negative | Leave has been used in advance, or leave was taken in the current year with none remaining from completed years (interpretation varies by jurisdiction). |
Zero | No leave remaining from completed years. |
Positive | Leave remaining from completed years. |
Each leave record also has a last anniversary date — the date the next entitlement is due in full. Once a pay includes a period that crosses 12 months from the last anniversary date, the system adds the new entitlement (based on the accrual rate) and updates the anniversary date automatically.
By default, this date aligns with an employee’s start date but may differ depending on local rules.
To-date balance
The anniversary balance is accompanied by a to-date balance, which combines the anniversary balance with a pro-rated portion earned since the last anniversary.
The calculation is:
Anniversary balance + Pro-rated portion = to-date balance
The pro-rated portion is determined automatically based on the number of days
since the last anniversary date up to the current pay period end:
Pro-rated portion = (accrual rate ÷ 365) × days since last anniversary
This means the pro-rated calculation takes care of itself — as long as the anniversary balance and last anniversary date are correct, the to-date balance will also remain accurate.
Example
Below is an example using an accrual rate of 10 days per completed year, with the employee’s last anniversary date of 01.01.2025 and three different employment stages:
6 months of service (period end 01.07.2025), then uses 1 day of leave
12 months of service (period end 01.01.2026)
18 months of service (period end 01.07.2026), then uses 1 day of leave
6 months of employment
The employee hasn’t yet completed a full year, so the anniversary balance = 0 days.
There are 181 days between 01.01.2025 and 01.07.2025.
Pro-rated portion = (10 ÷ 365) × 181 = 4.959 days
To-date balance = 0 + 4.959 = 4.959 days
After using 1 day of leave, the anniversary balance becomes negative:
Anniversary balance = -1
To-date balance = -1 + 4.959 = 3.959 days
12 months of employment
After one full year, the employee’s anniversary balance increases by 10 days, moving from -1 to 9 days.
The last anniversary date now becomes 01.01.2026.
Pro-rated portion = (10 ÷ 365) × 1 = 0.027 days
To-date balance = 9 + 0.027 = 9.027 days
18 months of employment
At 18 months, there are again 181 days from 01.01.2026 to 01.07.2026.
The anniversary balance remains 9 days.
Pro-rated portion = (10 ÷ 365) × 181 = 4.959 days
To-date balance = 9 + 4.959 = 13.959 days
After using another 1 day of leave:
Anniversary balance = 8
To-date balance = 8 + 4.959 = 12.959 days
✅ SmoothPay automatically handles these calculations as part of the pay process — keeping anniversary, pro-rated, and to-date balances in sync across all leave types that use anniversary-based accrual methods.
Nuance
It’s important to understand that while both an anniversary balance and a to-date balance exist, the active dollar-value liability isn’t always derived from the to-date balance.
Different jurisdictions apply different rules, and SmoothPay’s configuration reflects those variations.
Type | Calculation | Description |
Liability based on to-date balance | Anniversary balance + pro-rated portion = To-date balance | The anniversary balance is part of the internal calculation. Both balances are visible to the user, but the liability is based on the to-date balance. |
Liability based on anniversary balance, with pro-rated estimate | Anniversary balance + pro-rated portion = To-date balance | The anniversary balance determines the actual liability, while the to-date balance provides a guide-only estimate for reference. |
Liability based on anniversary balance only | (Completed years of service × Accrual rate) − Leave taken to-date = Anniversary balance | The anniversary balance is both the displayed and calculated liability — the to-date balance mirrors the same value. |
Accrual methods
SmoothPay supports several accrual methods to accommodate the compliance requirements of different jurisdictions.
The core anniversary and to-date calculation logic applies to all methods — except for percentage per pay, which operates on a purely transactional basis.
Method | How leave accrues | How leave is used |
Hours | Accrues annually and may include a pro-rated to-date balance. | Leave is entered and reduced in hours. |
Days | Accrues annually and may include a pro-rated to-date balance. | Leave is entered in hours but reduced in days, proportionate to the employee’s contracted hours per day. |
Weeks | Accrues annually and may include a pro-rated to-date balance. | Leave is entered in hours but reduced in weeks, proportionate to the employee’s contracted hours per week. Some jurisdictions may apply specific calculation rules that work differently |
Percentage per pay | Accrues transactionally per pay period based on selected time-based pay codes — there is no anniversary component. | Leave is entered and reduced in hours. |