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Community > AU Payroll >

AU Payroll - How To Pay Annual Leave

Started by Colin Peckover -   in AU Payroll

I cannot find a guide on how to pay annual leave. Can someone point me to it?

I can create an a leave request but the trouble starts when I go to pay it. It looks like I have to create an out of sequence pay period (One week) for each week or all weeks of annual leave. I cannot find anyting to confirm this or a guide on how to do it.
Hiya Colin - thanks for posting. There's a larger conversation on this where others have shared knowledge on how to process annual leave in Xero. If the discussion doesn't answer your question, just reach out to Support who'll be able to look into the detail and confirm :)

Kelly M (Community Manager)  

Those threads didn't help me understand how to pay annual leave. I can create it I am just having trouble understanding how to actually pay/process it.

I think I have to create the pay periods in advance for example one weeks leave from Monday the 4th to Friday the 8th would be paid on an out of sequence pay period ending Wednesday the 13th. Is this correct?

Also if I want to pay an employee four weeks annual leave on Friday the 1st. It is not the regular payday which is Wednesday. Do I need to create an out of sequence pay period for each week or just one for the whole four weeks?

Colin Peckover  

Can someone please reply to my last post?

Colin Peckover  

Hi Colin, as I noted above - best to reach out to Support for help with your questions here. Community is a place you can seek ideas and have discussions with your peers. At Support, we have specialists in each region that are trained to help with your payroll questions. If you need more detail, just reply to let them know.
I can see you've already touched base with the team about your initial question here, and I've re-opened this to ask if they can help with your following questions.

Kelly M (Community Manager)  

I have posted the response from support here as it might help someone else.

When a leave request is created, you need to enter the dates the employee wishes to take leave. Then at the bottom of the request, pay periods will automatically populate showing which pay period the leave will be paid in and the number of hours that will be paid.

The pay periods showing will be based on the payroll calendar the employee is linked to. For example if an employee is linked to a weekly calendar, then the pay periods that display in the leave request will be for a weekly pay period. I've included a Help Centre link below that steps you through creating a leave request.

Once the leave request is created and approved, it will then flow through to the employee's payslip when a pay run is created that is for the same date range as the leave request. Please note, If the leave request is for a prior pay period, the leave request will flow through to the current draft pay run.

In regards to paying leave in advance, this can be done by adjusting the hours in the leave request to the pay period you wish to pay it ie in the first week the employee takes leave. To do this go Payroll > Employees > select employee > Leave tab. If you have already created the Leave Request, select it. If not, please add a New Leave Request. Once the leave type, description and dates have been entered, a pay period selection will appear showing the pay period and hours that payroll will include the payment in. Adjust the hours in the pay period you wish to pay the leave in and then ensure you change the hours in the other pay periods to 0 (or as required).
If the leave start date is not within the pay period you are processing, an unscheduled pay run can be used to process the leave. Go to Payroll > Pay Runs > Add Pay Run > Unscheduled Pay Run. Then select the pay calendar and then the appropriate period end that the leave start date will fall within. Find the relevant employee and include in the pay run, then enter on the employee and edit payslip if required.
You may need to include a manual tax adjustment if you are paying leave in advance.
Xero Help Centre:

Submit an employee's leave request

Adjust tax

ATO Tax Tabler


Colin Peckover