Expert Guide: How To Calculate [And Enjoy] Your Leave Allowance

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One of the first things employees should inquire about when they join a new firm is the company’s leave policy. Confirming what leaves they have in place for different levels of staff will make it easier to understand what your leave allowance should add up to.

But in case the excitement of a new workplace overwhelms you, we’ll work out all the details you need to know about your leave allowance in this article. 

What Is Leave Allowance?

From the first day of employment, employees are entitled to an annual leave of at least six  working days with full salary payment at the stipulated time. This can further be increased to at least twelve working days.

Now depending on the company structure, the work time required to qualify for annual leave differs. However, the least time required is at least twelve months. 

An employee’s leave allowance basically refers to the accumulated, paid off-duty vacation that an employee is entitled to after one year or annual tenure in a company.

They are meant to collect this allowance during the period or days they spend on leave. 

This is why it is important to know the annual leave policy as well as the various types of leaves being offered by the company you work for.

Is Leave Allowance Compulsory In Nigeria?

According to the Nigerian Labor Law, an employee is entitled to an annual leave at the end of the fiscal year in which it is earned, but it can be postponed by mutual agreement as long as the holiday earning period does not exceed twenty-four months and both earned and deferred vacation is taken within 24 months.

Also, an employer may lower an employee’s yearly leave entitlement by the number of days of intermittent leave on full pay provided to the employee at the employee’s request during that leave cycle.

If a portion of an employee’s specified vacation term occurs on a public holiday, an additional day might be added based on the day of the week. 

Except in emergencies or instances requiring immediate attention, an employee is typically not expected to perform any corporate work during his or her leave time.

How is Leave Allowance Calculated?

Only the portion of a worker’s earnings received in cash (excluding overtime and other allowances) should be considered in the computation of leave pay and health allowances.

This implies that, depending on the agreed proportion, which is set by a contract of employment or a collective agreement, the computation will be based on the employee’s yearly base pay, which is:

Basic + Housing + Transportation, omitting additional allowances, bonuses, overtime rates, and so on.

However, while calculating leave allowance, it is important to consider the principles of salary negotiations, employment contracts, and sector – or industry standards.

Read More: HR Outsourcing 101: What, Why and Techniques to Outsource in 2021

How Is Leave Allowance Paid?

An employer is required to pay an employee leave compensation that is at least equal to the salary that the employee would have earned for working for a period equal to the duration of annual leave. 

The leave allowance is usually computed at the employee’s rate of remuneration immediately before the start of the period of annual leave.

An employee’s leave compensation is also supposed to be paid before the start of the leave period or on the employee’s regular paycheck.

Types Of Leave In Nigeria

Every company usually has a leave policy which is designed to help employees understand the types of leaves they are eligible for, as well as information on how to apply for them. 

With a leave policy, you can assure them that you will offer them the necessary time off to address any difficulties they may have or to take time off to travel, recuperate from an illness, celebrate their festivals, cope with life events, or simply rest.

Apart from public holidays, there are three main types of leaves commonly available in most organizations. 

We’ll detail what they are and then list out some major benefits employees can gain from utilizing paid time off. 

1. Sick Leave

Sick leave is time off granted by the firm to employees to allow them to recuperate from illness and care for their health. This type of leave policy allows for employees to receive the rest they require without fear of losing income.

Employees are entitled to 15 days of sick leave each year from their employers. You must, however, be flexible with your sick leave policies and enable employees to take longer ones if they have serious health concerns.

2. Casual leave 

An employee uses casual leave for travel, vacation, rest, and family activities. Such leaves are granted to employees to allow them to take time off for any life events, such as traveling to another country or attending weddings.

Giving the employee paid casual leave allows them to prioritize their personal lives as necessary, making them feel valued in the firm.


3. Maternity Leave

Maternity leave is an essential period for new moms. Make sure company policy allows for this sort of leave so that staff don’t have to worry about their jobs while caring for their infant.

Ideally, a maternity leave in Nigeria usually lasts from 6 to 14 weeks, depending on the leniency of the company policy.

Paid Leave Benefits

While it is important to chase the bag, most employees neglect the need to take time off to relax and recharge. The downside is that in the long run, accumulated fatigue can lead to serious burn out and even expensive work errors. 

Here are several benefits employees stand to gain when they take advantage of their annual leave period. 

1. Rejuvenation 

The human body requires a substantial amount of rest in order to renew itself for improved performance. Treating the body as an unserviceable machine that would eventually break down under strain is unjust.

So, from a medical standpoint, it is important to take some time off work for relaxation and other activities.

2. The Desire for New Ideas

The topic of what the employee does with their leave vacation has been raised, and the key response is that whatever they do during this time is beneficial to their intellect, awareness of their surroundings, and self.

When you are not bound by a routine, your senses and mind tend to see and process information in new ways.

Last Notes..

In today’s corporate world, it has become common practice for employees to decline taking their leave allowance in a bid to maximize it in the future. However, pushing the body consistently over a prolonged period of time has repercussions. It increases the risk of burnout and the chances of making work related errors.

Employers should encourage their employees to take their leaves when due as this ultimately leads to a healthier work-life balance and a more productive workforce.


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