Taking annual leave is a happy thing. Perhaps the second most happy thing, behind receiving your paycheck. Different countries have very different rules for annual leave. Let’s dive into how Singapore companies should entitle annual leave to their employees.
Who Is Eligible for Paid Annual Leave?
You must work for the current employer for at least 3 months, to be eligible for paid annual leave.
Do note that this eligibility is applied to both part-timers and contract employees.
How Is Annual Leave Calculated?
Singapore, like many other countries, practices leave entitlement by employees’ length of service, meaning how long they have stayed with the company.
Calculating length of service on a join-date basis is usually the practice. There is also a fiscal year basis, which very few companies practice. Join-date basis means years of service is based on employee’s join date, while fiscal year basis offers new entitlement on January 1st of every year.
Of course, as a means of appreciation and a method of enticing good employees, a company can certainly offer more days than what’s written as a rule. (According to our survey, about 50% of Singapore workers believe companies should provide 25 or more days of paid annual leave!)
How to Pro-rate Annual Leave?
Employee’s annual leave could be pro-rated, the formula being:
(Number of months of service ÷ 12 months) × Days of annual leave
We advise using MOM’s pro-rate calculator. Very handy! If it is less than 0.5 days, round it down; otherwise round it up to one day.
Leave is usually taken on a full-day basis, even if it is on a half working day, unless the employer grants half-day leave or hourly leave.
Can Annual Leave Be Carried Forward or Encashed in Singapore?
🔹 Employees who are COVERED under Part IV of the Employment Act
If the employee is covered under Part IV of the Employment Act (i.e. a workman earning a monthly basic salary of $4,500 or less, or non-workman earning a monthly basic salary of $2,600 or less), any unused leave can be carried forward to the next leave cycle of 12 months.
However, there are no laws specifying that unused leave after the carry forward period should be encashed. It is the employer’s discretion whether to encash, carry forward, or forfeit the unused leave.
🔹 Employees who are NOT COVERED under Part IV of the Employment Act
For those who are not covered under Part IV of the Employment Act, how unused annual leave should be treated will depend on what employment contract states.
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