Holiday carryover limits are set when creating a working pattern. Employees are given the carryover limit assigned to their working pattern when first being onboarded. Read more about this here.

You can edit the holiday carryover for an employee at any time under the settings tab on their profile.

When a carryover limit is applied, employees will be given an adjustment to their renewed holiday allowance if they had any leave left at the end of the previous holiday year. The adjustment applied will be no more than the limit they have been given.

For example, if an employee's holiday carryover limit is 3 days and they have 5 days left at the end of the year, they will only carry over 3. Likewise, if they had 1 day left they will only carryover the 1 day. 

Adjustments do not impact the annual leave amount. As you can see from the example below, the employee has 25 days annually with a 5 day adjustment, taking their remaining balance for the new year to 30 days. Adjustments will be cleared at the end of the new holiday year.