Set up an employee’s leave

You can assign default leave types to your employees based on National Employment Standards (NES), or create custom leave types with personalised accrual calculations. You’ll need to add opening balances for leave if you’ve paid an employee outside Xero this financial year.

Leave and employment basis

From the Taxes tab, you would have selected the employment basis for your employee. This affects what default leave types and accrual calculations are available to the employee.

  • Full-time and part-time employees - are provided default leave types and accrual calculations based on the minimum leave entitlements outlined in the NES (FairWork Ombudsman website). You can also create and assign a custom leave type.
  • Casual, labour hire and superannuation income stream employees - have no default leave types or accruals calculations. You’ll need to create and assign a custom leave type if you want these employees to request paid leave and accumulate leave.

Set up leave defaults for an employee

This is for full-time and part-time employees only.

  1. In the Payroll menu, select Employees.
  2. Click the employee's name to open their details.
  3. Click the Leave tab.
  4. Click Assign Default Leave Types.

Screen shot of Assign Default Leave Types.

Leave Balances show as 0. Accruals start once the employee is included in a posted pay run.

Enter opening leave balances

If the employee has accrued any leave outside of Xero this financial year, you’ll need enter these in now.

  1. Under Leave Balances, click current balance of the leave type.

    Leave balances link

  2. Scroll down to Opening Balance, and enter the leave accrued.
  3. Click Save.

Set up custom leave types for an employee

  1. Create a custom leave type.
  2. In the Payroll menu, select Employees.
  3. Click the employee's name to open their details.
  4. Click the Leave tab.
  5. Click Assign Leave Type.
  6. Complete leave details:
    • Leave - Select the leave pay item you created in step 1.
    • Leave Calculation Method - Select how you want this leave to accumulate.
    • Hours Accrued Annually - Enter the number of hours the employee accumulates per year for this leave type.
    • Opening Balance - Enter hours the employee has accumulated outside of Xero.
    • On termination unused balance is - Select what happens to accumulated leave when the employee’s employment ends. You can change this later.
  7. Click Save.