Every absence configuration in Oracle HCM Cloud begins with one decision: which plan type to use. Choose well and accruals, entitlements and balances behave exactly as the business expects. Choose carelessly and you spend the next sprint untangling balances that never should have existed. The good news is that there are only six plan types to know — and once you understand what each one is for, the rest of the setup follows naturally.
A common point of confusion trips people up before they even start, so let's clear it first.
"Formula" is not a plan type. Formula is an accrual method you select inside an Accrual plan — alongside options like incremental and front-loaded. Listing it as a seventh plan type is one of the most frequent errors we see in interviews and on real projects.
The six plan types at a glance
Oracle groups absence plans by how entitlement is earned and consumed. Each plan type answers a slightly different business question.
Accrual
Workers earn balance over time — the classic annual leave or PTO pattern. You define the accrual rate, ceiling, carryover rules and the accrual method (incremental, front-loaded, or formula-driven).
Qualification
Entitlement is granted based on length of service or a qualifying condition — typically sickness, maternity or other statutory leave with banded entitlements (e.g. full pay for X weeks, half pay thereafter).
No Entitlement
No balance is tracked at all. The plan simply records the absence for reporting and downstream processing — useful for unpaid leave or absences managed entirely outside the balance model.
Agreement
Entitlement is governed by a collective agreement or negotiated arrangement, where the terms sit outside the standard accrual and qualification logic.
Donation
Allows workers to donate accrued balance to a shared pool or to a specific colleague — common in compassionate or catastrophic-leave programs.
Compensatory
Balance is earned in lieu of payment for extra hours worked (time off in lieu). It ties closely to time and labour data feeding the accrual.
Across our implementation deliverables we model these plans against four legislative data groups — US, UK, Canada and India — because statutory leave behaves very differently in each. The plan type stays the same; the entitlement bands and accrual rates are localised per LDG.
How to pick the right one
Start from the business question, not the configuration screen:
- Does the worker earn balance over time? → Accrual.
- Is entitlement driven by service length or a statutory condition? → Qualification.
- Do you just need to record the absence with no balance? → No Entitlement.
- Is it governed by a negotiated agreement? → Agreement.
- Should workers share balance with each other? → Donation.
- Is time off earned for extra hours worked? → Compensatory.
Pick the plan type for the rule, not the leave name. "Sick leave" can be Qualification in the UK and Accrual elsewhere.
Before you build, sketch the entitlement on paper: how it's earned, the ceiling, carryover, and what happens at termination or rehire. Nine times out of ten the plan type chooses itself once that's written down — and you'll avoid the balance-carryover surprises that show up after a rehire.
Key takeaways
- There are exactly six plan types: Accrual, Qualification, No Entitlement, Agreement, Donation, Compensatory.
- "Formula" is an accrual method, not a plan type — don't count it as a seventh.
- Choose the plan type from the business rule, not the name of the leave.
- Localise entitlement per legislative data group; keep the plan type consistent.
Get these foundations right and the rest of Absence Management — eligibility profiles, accrual bands, the self-service experience — becomes a series of small, predictable decisions. That's exactly how we teach it in the live programme, working module by module on a real enterprise scenario.