- Most small businesses give casual leave, sick leave and earned (privilege) leave, plus a holiday list and weekly offs.
- Minimums come from your state’s Shops and Establishments Act or the Factories Act, so check what applies to you.
- A written policy, applied the same way to everyone, prevents most disputes.
The common types of leave
| Leave | What it is for | Typical days a year |
|---|---|---|
| Casual leave (CL) | Short personal needs, usually taken a day or two at a time | 7 to 12 |
| Sick leave (SL) | Illness, sometimes with a doctor’s note after 2 days | 6 to 12 |
| Earned or privilege leave (EL/PL) | Planned time off, earned by working; often carried forward | 12 to 18 |
| Compensatory off (comp off) | A day off in return for working a holiday or weekly off | As earned |
| Maternity leave | Required by law for eligible women employees | Up to 26 weeks |
What the law generally requires
Leave law in India depends on the kind of establishment and the state:
- Shops, offices, restaurants and similar businesses follow their state’s Shops and Establishments Act, which sets weekly holidays, festival holidays and minimum leave. The numbers differ from state to state.
- Factories follow the Factories Act, 1948, which gives adult workers one day of earned leave for every 20 days worked, once they have worked 240 days in a calendar year.
- National holidays: Republic Day (26 January), Independence Day (15 August) and Gandhi Jayanti (2 October) are paid holidays in every state. States add their own festival holidays.
- Maternity Benefit Act, 1961: establishments with 10 or more employees must give eligible women up to 26 weeks of paid maternity leave.
Your policy can be more generous than the law, but not less. If you are unsure of your state’s rules, ask a local labour consultant.
Decisions to make
- Leave year: calendar year (January to December) or financial year (April to March).
- Quotas: how many days of each type, and whether new joiners get a share for the part year.
- Carry forward: whether unused leave carries into next year, and up to how many days. Casual and sick leave usually lapse; earned leave often carries forward up to a limit such as 30 days.
- Half days: whether staff can take half a day of leave.
- Notice: how far in advance planned leave must be asked for.
- Approval: who approves leave, and how quickly.
- Unpaid leave: what happens when someone has no leave left. Usually the day is loss of pay.
A simple leave policy template
1. Leave year. The leave year runs from 1 January to 31 December.
2. Casual leave. 12 days a year. Up to 3 days at a time. Does not carry forward.
3. Sick leave. 6 days a year. A medical certificate is needed for more than 2 days in a row. Does not carry forward.
4. Earned leave. 15 days a year. Apply at least 7 days in advance. Up to 30 days carry forward.
5. Comp off. Working on a holiday or weekly off earns 1 day of comp off (half a day for a half day), to be taken within 30 days.
6. Holidays. The holiday list is published every December. Weekly offs are as per each person’s shift.
7. Requests. Leave is requested in the attendance app and approved by your manager. Unapproved absence is loss of pay.
8. New joiners. Leave is given in proportion to the months remaining in the year.
Adjust the numbers to your business and your state’s rules, then share the policy with every employee.
How leave affects salary
For monthly-paid staff, approved paid leave, holidays and weekly offs are paid days. Unpaid leave and absences are loss of pay. Our guide on calculating salary from attendance walks through an example.
Making it work day to day
- Keep balances visible so staff know what they have left before they ask.
- Approve or reject requests quickly, with a reason when you reject.
- Record leave the same day, not at month end.
- Review the policy once a year.
Leave types, balances and approvals in one place
StaffPrime lets you create your own leave types with yearly quotas, publish holidays, and approve requests from your phone. Approved leave flows into salary automatically.
Published 31 October 2026 by the StaffPrime team. General information only, not legal advice; leave law depends on your state and type of establishment.