Accrued Leave

Accrued leave is vacation or paid time off that an employee has earned but hasn’t used yet. Most companies allocate a set number of leave days per year and release them gradually, monthly, quarterly, or twice a year, rather than all at once on January 1. The portion that’s built up so far is what’s called accrued leave.

The rate and schedule of accrual depends on company policy. A straightforward example: a company that grants 12 days of annual leave releases one day per month. By March, an employee has accrued three days. By June, six. They’ve earned those days, but if they haven’t taken them, they sit in the balance.

From the employer’s side, accrued leave is a liability. Every unused day represents an obligation, either time the employee will eventually take off or a payment that may be owed if they leave the company.