diff --git a/addons/hr_holidays/models/hr_leave_type.py b/addons/hr_holidays/models/hr_leave_type.py
index e80a29357b6..47e1fd16654 100644
--- a/addons/hr_holidays/models/hr_leave_type.py
+++ b/addons/hr_holidays/models/hr_leave_type.py
@@ -326,17 +326,22 @@ class HolidaysType(models.Model):
                                 else:
                                     leave_duration = leave.number_of_hours_display
                                     leave_unit = 'hours'
-                                for available_allocation in sorted_available_allocations:
-                                    virtual_remaining_leaves = (available_allocation.number_of_days if leave_unit == 'days' else available_allocation.number_of_hours_display) - allocations_days_consumed[employee_id][holiday_status_id][available_allocation]['virtual_leaves_taken']
-                                    max_leaves = min(virtual_remaining_leaves, leave_duration)
-                                    days_consumed[available_allocation]['virtual_leaves_taken'] += max_leaves
+                                if holiday_status_id.requires_allocation != 'no':
+                                    for available_allocation in sorted_available_allocations:
+                                        virtual_remaining_leaves = (available_allocation.number_of_days if leave_unit == 'days' else available_allocation.number_of_hours_display) - allocations_days_consumed[employee_id][holiday_status_id][available_allocation]['virtual_leaves_taken']
+                                        max_leaves = min(virtual_remaining_leaves, leave_duration)
+                                        days_consumed[available_allocation]['virtual_leaves_taken'] += max_leaves
+                                        if leave.state == 'validate':
+                                            days_consumed[available_allocation]['leaves_taken'] += max_leaves
+                                        leave_duration -= max_leaves
+                                    if leave_duration > 0:
+                                        # There are not enough allocation for the number of leaves
+                                        days_consumed[False]['virtual_remaining_leaves'] -= leave_duration
+                                        return allocations_days_consumed
+                                else:
+                                    days_consumed[False]['virtual_leaves_taken'] += leave_duration
                                     if leave.state == 'validate':
-                                        days_consumed[available_allocation]['leaves_taken'] += max_leaves
-                                    leave_duration -= max_leaves
-                                if leave_duration > 0:
-                                    # There are not enough allocation for the number of leaves
-                                    days_consumed[False]['virtual_remaining_leaves'] -= leave_duration
-                                    return allocations_days_consumed
+                                        days_consumed[False]['leaves_taken'] += leave_duration
 
         # Future available leaves
         for employee_id, allocation_intervals_by_status in allocation_employees.items():
diff --git a/addons/hr_holidays/tests/test_leave_requests.py b/addons/hr_holidays/tests/test_leave_requests.py
index f39e15d75a6..248d43ed073 100644
--- a/addons/hr_holidays/tests/test_leave_requests.py
+++ b/addons/hr_holidays/tests/test_leave_requests.py
@@ -767,3 +767,79 @@ class TestLeaveRequests(TestHrHolidaysCommon):
             'date_to': '2021-11-19 23:59:59',
         })
         self.assertEqual(time_off.active, False)
+    def test_holiday_type_requires_no_allocation(self):
+        # holiday_type_2 initially requires an allocation
+        # Once an allocation is granted and a leave is taken,
+        # the holiday type is changed to no longer require an allocation.
+        # Leaves taken and available days should be correctly computed.
+        with freeze_time('2020-09-15'):
+            allocation = self.env['hr.leave.allocation'].create({
+                'name': 'Expired Allocation',
+                'employee_id': self.employee_emp_id,
+                'holiday_status_id': self.holidays_type_2.id,
+                'number_of_days': 5,
+                'state': 'confirm',
+                'date_from': '2020-01-01',
+                'date_to': '2020-12-31',
+            })
+            allocation.action_validate()
+            leave1 = self.env['hr.leave'].with_user(self.user_employee_id).create({
+                'name': 'Holiday Request',
+                'employee_id': self.employee_emp_id,
+                'holiday_status_id': self.holidays_type_2.id,
+                'date_from': '2020-09-06',
+                'date_to': '2020-09-08',
+                'number_of_days': 3,
+            })
+
+            self.assertEqual(
+                self.holidays_type_2.get_employees_days([self.employee_emp_id])[self.employee_emp_id][self.holidays_type_2.id],
+                {
+                    'closest_allocation_to_expire': allocation,
+                    'max_leaves': 5,
+                    'leaves_taken': 0,
+                    'remaining_leaves': 5,
+                    'virtual_remaining_leaves': 2,
+                    'virtual_leaves_taken': 3,
+                }
+            )
+
+            self.holidays_type_2.requires_allocation = 'no'
+            leave2 = self.env['hr.leave'].with_user(self.user_employee_id).create({
+                'name': 'Holiday Request',
+                'employee_id': self.employee_emp_id,
+                'holiday_status_id': self.holidays_type_2.id,
+                'date_from': '2020-07-06',
+                'date_to': '2020-07-08',
+                'number_of_days': 3,
+            })
+
+            # The 5 allocation days are not consumed anymore
+            # virtual_remaining_leaves reflect the total number of leave days taken
+            self.assertEqual(
+                self.holidays_type_2.get_employees_days([self.employee_emp_id])[self.employee_emp_id][self.holidays_type_2.id],
+                {
+                    'closest_allocation_to_expire': allocation,
+                    'max_leaves': 5,
+                    'leaves_taken': 0,
+                    'remaining_leaves': 5,
+                    'virtual_remaining_leaves': 5,
+                    'virtual_leaves_taken': 6,
+                }
+            )
+
+            leave1.with_user(self.user_hrmanager_id).action_approve()
+            leave2.with_user(self.user_hrmanager_id).action_approve()
+
+            # leaves_taken and virtual_leaves_taken reflect the total number of leave days taken
+            self.assertEqual(
+                self.holidays_type_2.get_employees_days([self.employee_emp_id])[self.employee_emp_id][self.holidays_type_2.id],
+                {
+                    'closest_allocation_to_expire': allocation,
+                    'max_leaves': 5,
+                    'leaves_taken': 6,
+                    'remaining_leaves': 5,
+                    'virtual_remaining_leaves': 5,
+                    'virtual_leaves_taken': 6,
+                }
+            )