The time off plan must specify a time off in the Time Off for Termination Adjustment field. This configuration tells Workday which time off component to use when generating the adjustment that removes the worker's entire remaining balance during termination processing.

When the Adjust Time Off Balances service step runs in the Termination business process, Workday evaluates the eligible plan, determines the remaining balance, and creates a termination adjustment using the designated time off. The adjustment reduces the plan balance to zero. Where payroll integration or Workday Payroll calculations are appropriately configured, that adjustment can support payment of the outstanding amount.

A payout accrual is not required because an accrual ordinarily adds units to a time off plan; it does not remove and pay the existing termination balance. Accrual Frequency Method controls whether ordinary accrual processing occurs at the start or end of a processing period and does not establish termination payout behavior. Time Off Forfeiture Adjustment is used when a balance is being forfeited under plan rules, not when the organization intends to pay the balance upon termination.

Study Guide reference: Absence Management Business Processes -- Automating Payout of Plan Balance upon Termination, particularly the time off plan's termination-adjustment configuration.