Set unused leave as paid on termination
When an employee leaves your organisation with unused leave, you need to set it as 'paid' in Xero. When you process their final pay later, Xero pays it to the employee as a lump sum.
- In the Payroll menu, select Employees.
- Click the employee's name to open their details.
- Click the Leave tab.
Under Leave Balances, click the balance of the leave type.
Click On termination unused balance is, then select Paid Out.Unused leave paid as an employment termination payment (ETP) isn't included in a final pay and should be set as Not Paid Out.
- Click Save.
You can now process the employee's final pay for a termination.