diff --git a/erpnext/hr/doctype/holiday_list/test_holiday_list.py b/erpnext/hr/doctype/holiday_list/test_holiday_list.py
index c9239ed..aed901a 100644
--- a/erpnext/hr/doctype/holiday_list/test_holiday_list.py
+++ b/erpnext/hr/doctype/holiday_list/test_holiday_list.py
@@ -2,6 +2,7 @@
 # License: GNU General Public License v3. See license.txt
 
 import unittest
+from contextlib import contextmanager
 from datetime import timedelta
 
 import frappe
@@ -30,3 +31,24 @@
 		"holidays" : holiday_dates
 		}).insert()
 	return doc
+
+
+@contextmanager
+def set_holiday_list(holiday_list, company_name):
+	"""
+	Context manager for setting holiday list in tests
+	"""
+	try:
+		company = frappe.get_doc('Company', company_name)
+		previous_holiday_list = company.default_holiday_list
+
+		company.default_holiday_list = holiday_list
+		company.save()
+
+		yield
+
+	finally:
+		# restore holiday list setup
+		company = frappe.get_doc('Company', company_name)
+		company.default_holiday_list = previous_holiday_list
+		company.save()
diff --git a/erpnext/hr/doctype/leave_application/test_leave_application.py b/erpnext/hr/doctype/leave_application/test_leave_application.py
index 75e99f8..3e73976 100644
--- a/erpnext/hr/doctype/leave_application/test_leave_application.py
+++ b/erpnext/hr/doctype/leave_application/test_leave_application.py
@@ -501,7 +501,7 @@
 			leave_type_name="_Test_CF_leave_expiry",
 			is_carry_forward=1,
 			expire_carry_forwarded_leaves_after_days=90)
-		leave_type.submit()
+		leave_type.insert()
 
 		create_carry_forwarded_allocation(employee, leave_type)
 
@@ -723,19 +723,22 @@
 			carry_forward=1)
 		leave_allocation.submit()
 
-def make_allocation_record(employee=None, leave_type=None, from_date=None, to_date=None):
+def make_allocation_record(employee=None, leave_type=None, from_date=None, to_date=None, carry_forward=False, leaves=None):
 	allocation = frappe.get_doc({
 		"doctype": "Leave Allocation",
 		"employee": employee or "_T-Employee-00001",
 		"leave_type": leave_type or "_Test Leave Type",
 		"from_date": from_date or "2013-01-01",
 		"to_date": to_date or "2019-12-31",
-		"new_leaves_allocated": 30
+		"new_leaves_allocated": leaves or 30,
+		"carry_forward": carry_forward
 	})
 
 	allocation.insert(ignore_permissions=True)
 	allocation.submit()
 
+	return allocation
+
 def get_employee():
 	return frappe.get_doc("Employee", "_T-Employee-00001")
 
@@ -780,9 +783,10 @@
 	allocate_leave.submit()
 
 
-def get_first_sunday(holiday_list):
-	month_start_date = get_first_day(nowdate())
-	month_end_date = get_last_day(nowdate())
+def get_first_sunday(holiday_list, for_date=None):
+	date = for_date or getdate()
+	month_start_date = get_first_day(date)
+	month_end_date = get_last_day(date)
 	first_sunday = frappe.db.sql("""
 		select holiday_date from `tabHoliday`
 		where parent = %s
diff --git a/erpnext/hr/report/employee_leave_balance/employee_leave_balance.py b/erpnext/hr/report/employee_leave_balance/employee_leave_balance.py
index 3f0337e..3a5f2fe 100644
--- a/erpnext/hr/report/employee_leave_balance/employee_leave_balance.py
+++ b/erpnext/hr/report/employee_leave_balance/employee_leave_balance.py
@@ -16,6 +16,8 @@
 
 
 def execute(filters=None):
+	filters = frappe._dict(filters or {})
+
 	if filters.to_date <= filters.from_date:
 		frappe.throw(_('"From Date" can not be greater than or equal to "To Date"'))
 
@@ -103,7 +105,7 @@
 				or ("HR Manager" in frappe.get_roles(user)):
 				if len(active_employees) > 1:
 					row = frappe._dict()
-				row.employee = employee.name,
+				row.employee = employee.name
 				row.employee_name = employee.employee_name
 
 				leaves_taken = get_leaves_for_period(employee.name, leave_type,
@@ -114,7 +116,7 @@
 				opening = get_opening_balance(employee.name, leave_type, filters, carry_forwarded_leaves)
 
 				row.leaves_allocated = new_allocation
-				row.leaves_expired = expired_leaves - leaves_taken if expired_leaves - leaves_taken > 0 else 0
+				row.leaves_expired = expired_leaves
 				row.opening_balance = opening
 				row.leaves_taken = leaves_taken
 
@@ -202,7 +204,11 @@
 			continue
 
 		if record.to_date < getdate(to_date):
+			# leave allocations ending before to_date, reduce leaves taken within that period
+			# since they are already used, they won't expire
 			expired_leaves += record.leaves
+			expired_leaves += get_leaves_for_period(employee, leave_type,
+					record.from_date, record.to_date)
 
 		if record.from_date >= getdate(from_date):
 			if record.is_carry_forward:
diff --git a/erpnext/hr/report/employee_leave_balance/test_employee_leave_balance.py b/erpnext/hr/report/employee_leave_balance/test_employee_leave_balance.py
new file mode 100644
index 0000000..05316f1
--- /dev/null
+++ b/erpnext/hr/report/employee_leave_balance/test_employee_leave_balance.py
@@ -0,0 +1,162 @@
+# Copyright (c) 2021, Frappe Technologies Pvt. Ltd. and Contributors
+# License: GNU General Public License v3. See license.txt
+
+
+import unittest
+
+import frappe
+from frappe.utils import (
+	add_days,
+	add_months,
+	get_year_ending,
+	get_year_start,
+	getdate,
+	flt,
+)
+
+from erpnext.hr.doctype.employee.test_employee import make_employee
+from erpnext.hr.report.employee_leave_balance.employee_leave_balance import execute
+from erpnext.hr.doctype.holiday_list.test_holiday_list import set_holiday_list
+from erpnext.hr.doctype.leave_type.test_leave_type import create_leave_type
+from erpnext.hr.doctype.leave_application.test_leave_application import get_first_sunday, make_allocation_record
+from erpnext.payroll.doctype.salary_slip.test_salary_slip import make_holiday_list, make_leave_application
+from erpnext.hr.doctype.leave_ledger_entry.leave_ledger_entry import process_expired_allocation
+
+test_records = frappe.get_test_records('Leave Type')
+
+class TestEmployeeLeaveBalance(unittest.TestCase):
+	def setUp(self):
+		for dt in ['Leave Application', 'Leave Allocation', 'Salary Slip', 'Leave Ledger Entry', 'Leave Type']:
+			frappe.db.delete(dt)
+
+		frappe.set_user('Administrator')
+
+		self.employee_id = make_employee('test_emp_leave_balance@example.com', company='_Test Company')
+		self.holiday_list = make_holiday_list('_Test Emp Balance Holiday List', get_year_start(getdate()), get_year_ending(getdate()))
+
+		self.date = getdate()
+		self.year_start = getdate(get_year_start(self.date))
+		self.mid_year = add_months(self.year_start, 6)
+		self.year_end = getdate(get_year_ending(self.date))
+
+
+	def tearDown(self):
+		frappe.db.rollback()
+
+	@set_holiday_list('_Test Emp Balance Holiday List', '_Test Company')
+	def test_employee_leave_balance(self):
+		frappe.get_doc(test_records[0]).insert()
+
+		# 5 leaves
+		allocation1 = make_allocation_record(employee=self.employee_id, from_date=add_days(self.year_start, -11),
+			to_date=add_days(self.year_start, -1), leaves=5)
+		# 30 leaves
+		allocation2 = make_allocation_record(employee=self.employee_id, from_date=self.year_start, to_date=self.year_end)
+		# expires 5 leaves
+		process_expired_allocation()
+
+		# 4 days leave
+		first_sunday = get_first_sunday(self.holiday_list, for_date=self.year_start)
+		leave_application = make_leave_application(self.employee_id, first_sunday, add_days(first_sunday, 3), '_Test Leave Type')
+		leave_application.reload()
+
+		filters = {
+			'from_date': allocation1.from_date,
+			'to_date': allocation2.to_date,
+			'employee': self.employee_id
+		}
+
+		report = execute(filters)
+
+		expected_data = [{
+			'leave_type': '_Test Leave Type',
+			'employee': self.employee_id,
+			'employee_name': 'test_emp_leave_balance@example.com',
+			'leaves_allocated': flt(allocation1.new_leaves_allocated + allocation2.new_leaves_allocated),
+			'leaves_expired': flt(allocation1.new_leaves_allocated),
+			'opening_balance': flt(0),
+			'leaves_taken': flt(leave_application.total_leave_days),
+			'closing_balance': flt(allocation2.new_leaves_allocated - leave_application.total_leave_days),
+			'indent': 1
+		}]
+
+		self.assertEqual(report[1], expected_data)
+
+	@set_holiday_list('_Test Emp Balance Holiday List', '_Test Company')
+	def test_opening_balance_on_alloc_boundary_dates(self):
+		frappe.get_doc(test_records[0]).insert()
+
+		# 30 leaves allocated
+		allocation1 = make_allocation_record(employee=self.employee_id, from_date=self.year_start, to_date=self.year_end)
+		# 4 days leave application in the first allocation
+		first_sunday = get_first_sunday(self.holiday_list, for_date=self.year_start)
+		leave_application = make_leave_application(self.employee_id, first_sunday, add_days(first_sunday, 3), '_Test Leave Type')
+		leave_application.reload()
+
+		# Case 1: opening balance for first alloc boundary
+		filters = {
+			'from_date': self.year_start,
+			'to_date': self.year_end,
+			'employee': self.employee_id
+		}
+		report = execute(filters)
+		self.assertEqual(report[1][0].opening_balance, 0)
+
+		# Case 2: opening balance after leave application date
+		filters = {
+			'from_date': add_days(leave_application.to_date, 1),
+			'to_date': self.year_end,
+			'employee': self.employee_id
+		}
+		report = execute(filters)
+		self.assertEqual(report[1][0].opening_balance, (allocation1.new_leaves_allocated - leave_application.total_leave_days))
+
+		# Case 3: leave balance shows actual balance and not consumption balance as per remaining days near alloc end date
+		# eg: 3 days left for alloc to end, leave balance should still be 26 and not 3
+		filters = {
+			'from_date': add_days(self.year_end, -3),
+			'to_date': self.year_end,
+			'employee': self.employee_id
+		}
+		report = execute(filters)
+		self.assertEqual(report[1][0].opening_balance, (allocation1.new_leaves_allocated - leave_application.total_leave_days))
+
+	@set_holiday_list('_Test Emp Balance Holiday List', '_Test Company')
+	def test_opening_balance_considers_carry_forwarded_leaves(self):
+		leave_type = create_leave_type(
+			leave_type_name="_Test_CF_leave_expiry",
+			is_carry_forward=1)
+		leave_type.insert()
+
+		# 30 leaves allocated for first half of the year
+		allocation1 = make_allocation_record(employee=self.employee_id, from_date=self.year_start,
+			to_date=self.mid_year, leave_type=leave_type.name)
+		# 4 days leave application in the first allocation
+		first_sunday = get_first_sunday(self.holiday_list, for_date=self.year_start)
+		leave_application = make_leave_application(self.employee_id, first_sunday, add_days(first_sunday, 3), leave_type.name)
+		leave_application.reload()
+		# 30 leaves allocated for second half of the year + carry forward leaves (26) from the previous allocation
+		allocation2 = make_allocation_record(employee=self.employee_id, from_date=add_days(self.mid_year, 1), to_date=self.year_end,
+			carry_forward=True, leave_type=leave_type.name)
+
+		# Case 1: carry forwarded leaves considered in opening balance for second alloc
+		filters = {
+			'from_date': add_days(self.mid_year, 1),
+			'to_date': self.year_end,
+			'employee': self.employee_id
+		}
+		report = execute(filters)
+		# available leaves from old alloc
+		opening_balance = allocation1.new_leaves_allocated - leave_application.total_leave_days
+		self.assertEqual(report[1][0].opening_balance, opening_balance)
+
+		# Case 2: opening balance one day after alloc boundary = carry forwarded leaves + new leaves alloc
+		filters = {
+			'from_date': add_days(self.mid_year, 2),
+			'to_date': self.year_end,
+			'employee': self.employee_id
+		}
+		report = execute(filters)
+		# available leaves from old alloc
+		opening_balance = allocation2.new_leaves_allocated + (allocation1.new_leaves_allocated - leave_application.total_leave_days)
+		self.assertEqual(report[1][0].opening_balance, opening_balance)
diff --git a/erpnext/payroll/doctype/salary_slip/test_salary_slip.py b/erpnext/payroll/doctype/salary_slip/test_salary_slip.py
index bcf981b..a4834d9 100644
--- a/erpnext/payroll/doctype/salary_slip/test_salary_slip.py
+++ b/erpnext/payroll/doctype/salary_slip/test_salary_slip.py
@@ -1010,15 +1010,16 @@
 	frappe.db.set_value('HR Settings', None, 'leave_status_notification_template', None)
 	frappe.db.set_value('HR Settings', None, 'leave_approval_notification_template', None)
 
-def make_holiday_list():
+def make_holiday_list(list_name=None, from_date=None, to_date=None):
 	fiscal_year = get_fiscal_year(nowdate(), company=erpnext.get_default_company())
-	holiday_list = frappe.db.exists("Holiday List", "Salary Slip Test Holiday List")
+	name = list_name or "Salary Slip Test Holiday List"
+	holiday_list = frappe.db.exists("Holiday List", name)
 	if not holiday_list:
 		holiday_list = frappe.get_doc({
 			"doctype": "Holiday List",
-			"holiday_list_name": "Salary Slip Test Holiday List",
-			"from_date": fiscal_year[1],
-			"to_date": fiscal_year[2],
+			"holiday_list_name": name,
+			"from_date": from_date or fiscal_year[1],
+			"to_date": to_date or fiscal_year[2],
 			"weekly_off": "Sunday"
 		}).insert()
 		holiday_list.get_weekly_off_dates()