Set up an employee's time off

Set up time off for your employees so their entitlements are accurate and they're paid correctly when on leave. You can also reclaim it in your Employer Payment Summary (EPS).

You only need to do this once, before the employee's first pay run.

Before you start

  • Add the employee's salary and employment information when you add them to payroll in Xero
  • Calculate your employee's eligibility for holiday entitlements and agricultural workers

Calculate holiday entitlement (gov.uk website)

Calculate your agricultural worker holiday entitlement (gov.uk website)

Set up a new employee's time off accruals and balances

  1. In the Payroll menu, select Employees.
  2. Click the name of the employee to open their details.
  3. Select the Time Off tab and then click Assign Time Off Type.
  4. Complete the fields:
    • Time Off - Choose the type of time off to add to an employee. For example, holidays.
    • Schedule of Accrual - Choose the schedule that applies to the time off type:
      • Beginning of the Calendar Year - Time off will reset after the first pay run that includes 1st January.
      • On Anniversary Date - Time off will reset after the pay run that includes the anniversary of your employee’s start date.
      • Each Pay Period - Time off accrues after each pay period based on the Hours Accrued Annually.
      • Each Hour Worked - Time off accrues after each pay period based on the Rate Accrued per Hour and the number of hours worked each period.
    • Hours Accrued Annually - Enter the number of hours your employee will accrue annually.
    • (Optional) Maximum to Accrue - Choose the maximum number of hours an employee can accrue.
    • Balance - Add the hours for an employee's opening balance. The number of hours you enter would be:
      • Beginning of Calendar Year or On Anniversary Date use your employee's annual entitlement less time off already used.
      • Each Pay Period or Each Hour Worked use your employee's hours accrued to date, Xero will continue to accrue from this balance.
  5. Click Save.

Xero updates your employee’s payslip to reflect the time off separately each time a request is approved.