Introduction to Monthly Vacation Accrual

This article explains how to set up a vacation policy with monthly accrual in BitaBIZ.

The article covers:

how to set up policies
which planning rules can be used
how vacation is managed in the calendar and integrations

This article describes the general functionality in BitaBIZ.
If your company follows specific national vacation rules, you should also follow the setup in the relevant country-specific article.

Other leave types that are settled via an additional balance (e.g. 6th vacation week, other vacation, and care days) are set up separately from vacation. Read more about additional balances here.

Monthly Accrual

With monthly accrual, employees earn vacation days continuously throughout the year.

Accrual is calculated based on:

the annual number of vacation days
the employee's hire date
the selected accrual method

If a vacation policy grants 25 vacation days per year, the employee will accrue 2.08 days per month. Accrual continues automatically as long as the employee is employed.

Set Up Monthly Vacation Accrual on a Policy

The accrual rule is selected on the policy and applies to all employees under it.

Go to Setup Admin
Select Modules
Click Create new policy or Edit an existing one
Open the Vacation tab
Find the Accrual section
Then select: Accrual method → Monthly accrual

Note: The accrual method (annual or monthly) can only be chosen when creating a policy and cannot be changed later.

Accrual Settings

When monthly accrual is selected, the following settings can be configured.

Vacation Year

Select which vacation year the policy should follow.

The vacation year defines:

the earning period
the usage period

These rules vary from country to country.

Therefore, the vacation year should be chosen in accordance with your company's local legislation.

See country-specific articles for details.

Annual Accrued Days

Enter the number of vacation days the employee accrues per year.

The system will then automatically calculate monthly accrual.

Accrual for New Employees

New employees start accruing vacation from their hire date.

If the employee starts:

on the 1st of the month → a full month's accrual is earned
mid-month → accrual is calculated proportionally

Start-of-period or End-of-period Accrual

Choose when accrued vacation days become available to employees.

Start-of-period accrual
Vacation days become available at the beginning of the month.
End-of-period accrual
Vacation days only become available at the end of the month.

Selecting a Vacation Registration Rule

The vacation registration rule determines how employees can plan vacation. Set this up by:

Go to "Setup admin".
Select "Modules".
Click "Edit" next to the desired policy, or press "Create new policy".
Open the "Vacation" section.
Open the "Rules" subsection.

BitaBIZ supports three types of vacation registration rules:

Max
Employees can only plan vacation that has already been accrued.
This ensures that employees never have a negative vacation balance.
Unpaid
Employees can request vacation without pay.
This method is typically used if the employee does not have enough vacation balance.
Advance
Employees can plan vacation before the days are accrued.
This means employees can use vacation days in advance (advance vacation), which are then accrued over the course of the vacation year.
This allows for a negative vacation balance, which is balanced out over time.
Here, you can set on the policy how many days of advance vacation an employee may have.

The vacation registration rule is selected individually for each staff group via the policy settings.

Approval requirements can be enabled or disabled.

Choose whether employees can register half vacation days or only whole days.

Find user guides for the three vacation registration rules here:

User guide for vacation with the Max rule

User guide for vacation with the Unpaid rule

User guide for vacation with the Advance rule

Click the image to see the 3 vacation methods:

Optional Settings for the Vacation Policy

Once you have set up the basic vacation policy with monthly accrual, you can add a range of optional settings.

These settings help manage planning, calendar rules, and integrations.

Planning Rules

Minimum Vacation Balance

You can require that a minimum number of vacation days are planned before employees can register days from an additional balance (e.g. other vacation).

This setting is found under “Rules” on the policy.

This rule can help ensure that vacation days are taken on time and not lost.

Note: This rule is relevant for setups following the Danish vacation year, as the vacation law allows up to 5 vacation days left to be carried over or paid out

Handling Vacation Left

If the vacation policy follows the Danish vacation year, unused vacation days expire on 12/31.

During the transition period September 1 – December 31, remaining days are automatically used before new vacation days.

Advance Vacation

If advance vacation is enabled, employees can take vacation before the days are accrued. However, this only applies to the extent that the borrowed vacation days can be earned back before the end of the vacation year, unless otherwise allowed.

You can choose between:

allowing employees to use vacation days in one vacation period that will only be accrued in the next (i.e. a negative vacation balance can be carried over to the next vacation year)
restricting advance vacation to the current vacation year, so that no negative balance is carried over to the next period

This setting is found under Vacation → Rules on the policy.

Note: Carrying over a negative vacation balance to a new vacation year is not in accordance with Danish vacation law. If carryover is allowed, this should be coordinated with your payroll system setup.

Public Holidays

Fixed official holidays BitaBIZ supports official holidays for 40+ countries. Vacation days that fall on holidays are not deducted from the vacation balance. Add holidays under “Holidays” in the policy – they are automatically created in employees’ calendars.
Floating holidays Floating holidays can be freely chosen by the employee. They are created via an additional balance or day bank, which can be renamed to “Floating holidays” and supports accrual. Gives employees flexibility to choose their own days off, e.g. for religious reasons.

Weekends

Work week

Specify whether weekends should count in the vacation calculation or be considered days off.

Set this in the policy under Work week → Weekend days off.

Approver notification

Reminder to approver

You can send an automatic reminder to approvers if vacation or absence registrations are not approved by a chosen date.

Activate this under Modules → Notifications & rules → Payroll administration.

Integrations

Payroll export Vacation can be transferred to the company’s payroll system. Once vacation is processed in payroll, the registration is locked and cannot be changed by the employee. 📑 Read more about payroll export here
Outlook Exchange Vacation is automatically synced to employees’ Outlook calendars when the integration is enabled. 📑 Read more about the Outlook integration here!

Policies with or without paid vacation

Absence codes for payroll system

You can link different absence codes for vacation to the policies.

Absence codes can be customized per staff group, e.g. with or without paid vacation, so they match the setup in the payroll system.

Special employee groups

If your company has employees with special terms, you may need a customized vacation setup.

This typically applies to:

Part time employees, where accrual depends on the number of workdays
Students and apprentices, who may have special rules, e.g. for advance vacation

In these cases, we recommend following the relevant articles for correct setup:

Read more about vacation policy for part time employees
Read more about vacation policy for students and apprentices

Note: Rules for these employee groups may be country-specific.

FAQ

When does a new employee start accruing vacation?

An employee accrues vacation from their employment date.

If the employee starts on the 1st of the month, a full month’s accrual is earned
If the employee starts mid-month, vacation is accrued proportionally (per employment day)

Accrual is calculated automatically based on the vacation policy (e.g. 2.08 days per month for 25 days annually).

What is the difference between vacation and other vacation in the system?

Vacation and other vacation (additional balance) are two separate balances with their own rules:

Vacation: Statutory vacation days, accrued according to applicable rules
Other vacation (additional balance): Extra days off (e.g. 6th vacation week or care days), defined by the company. These are not covered by the vacation law.

How do holidays work in the system?

Holidays are linked to the policy under the Holidays tab.

If vacation overlaps with a holiday:

the holiday does not count as a vacation day
the vacation balance is therefore not reduced for that day

Example:
A week with vacation and one holiday → only 4 vacation days are deducted.

When do you use monthly accrual for a vacation policy?

Monthly accrual is used in countries where vacation is accrued continuously.

The choice of accrual method depends on the country’s rules and the company’s setup.

Find country-specific setups here.

How do I activate holidays for a country in the calendar?

To activate country-specific holidays

Go to Setup Admin → Modules
Open or create a policy
Go to the Holidays section
Select country and check the relevant holidays to activate them on the policy

What should I do if a holiday is missing from the list?

BitaBIZ retrieves holidays from timeanddate.com, so we generally only support holidays listed there.

If an official holiday is missing from the list, it must be handled manually.
Contact our support and we’ll help you further.

If it’s not an official holiday you’re missing, you can add it by creating your own custom registration types. Read more about how to create these here.

When do accrued vacation days become available?

The availability of accrued vacation days depends on the setting in the policy:

Start-of-period → at the beginning of the month
For example, September’s accrued days are added on 9/1 and can be used from then
End-of-period → at the end of the month
For example, September’s accrued days are added on 10/1 and can be used from then

Can employees take vacation before it’s accrued?

Whether employees can use vacation in advance depends on the vacation rule in the policy:

Max → only accrued vacation can be used
Advance vacation → vacation can be taken before it’s accrued
The number of possible advance days is specified in the policy
Unpaid leave → vacation without pay is possible

What does “Vacation days used in the vacation year are not limited to the days accrued in the same year” mean?

This setting is relevant if employees should be able to take vacation from the next vacation year (i.e. use more days than they accrue in the current vacation year).

If this setting is not enabled, employees cannot register vacation that actually uses days from the next vacation year – even if advance vacation is enabled.

When this setting is enabled, it’s possible to use more vacation days in the vacation year than are accrued in the same year.

This means the vacation year can end with a negative vacation balance, which is carried over to the next vacation year.

The negative balance is then offset against accrual in the new vacation year.

Note that carrying over a negative vacation balance to a new vacation year is not in accordance with Danish vacation law.

If the vacation registration rule for advance is enabled, but the setting "Vacation days used in the vacation year are not limited to the days accrued in the same year" is not, employees can only use the vacation days accrued in the same vacation year and cannot end the vacation year with a negative balance.

Can we change the accrual method on an existing vacation policy?

No. The accrual method (e.g., yearly or monthly) cannot be changed on an existing vacation policy after it has been created.

This means that:

You cannot edit an existing policy to change the accrual method
Instead, you need to create a new policy with the desired setup

If you want to change the accrual method, you should:

Note the employees' current vacation balances
Create a new vacation policy
Assign employees to the new policy
Adjust balances manually as needed

Why can't an employee register vacation?

If an employee can't register vacation, it could be due to several reasons:

The max rule is enabled (only accrued days can be used)
There aren't enough vacation days left
Another type of registration is blocking it
The selected period consists only of public holidays

For advance vacation:
Even if advance vacation is enabled, the employee can only register vacation to the extent that the days can be accrued within the same vacation year, which means:

The employee may have a temporary negative balance
But the balance can't be so negative that it can't be balanced out before the end of the vacation year

If the employee tries to register more vacation than this, the registration will be rejected.

If you want to allow more advance:
Enable the setting: “Vacation days used in the vacation year are not limited to the days accrued in the same vacation year”

This allows a negative vacation balance to be carried over to the next vacation year.

Note:
This is not in accordance with Danish vacation law.

What should we do if employees shouldn't accrue vacation?

If employees shouldn't accrue vacation, it's not recommended to use vacation with 0 days.

Instead, you should use a registration type under “Other leave,” so the vacation still appears in BitaBIZ, but no vacation accounting is kept.

Vacation policy – Monthly earning