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Leave Types

Learn how to view, search, create, and edit leave types used for leave tracking, roster colors, accruals, and pay settings in Finance.

Written by Catalino Jr Basaka

Open Leave Types

From the left sidebar, select Finance.

At the top of the Finance page, select Leave.

This opens the Leave Types page.

Review the Leave Types page

The Leave Types page includes:

  • A Search leave types field

  • A Create Leave Type button

  • A table of existing leave types

The table shows:

  • Name

  • Status

  • Type

  • Row action menu

Each leave type also has a color indicator beside its name.

Search for a leave type

Use the Search leave types field to find an existing leave type by name.

This is useful when your organization has many leave types configured.

Create a new leave type

Select Create Leave Type.

A modal will open where you can configure the leave type name, color, active status, paid status, and finance assignment if available.
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Complete the leave type details

In the Create Leave Type modal, complete the available fields.

Add:

  • Name
    ​     Enter the leave type name, such as Annual Leave.

  • Color
    ​     Choose the fallback roster color for leave shifts when no roster color rule matches this leave type.

  • Active
    ​     Toggle this on if the leave type should be available.

  • Paid
    ​     Toggle this on if the leave type is paid leave.

Select Save when finished.

Review status and type

After saving, the leave type appears in the table.

The Status column shows whether the leave type is active.

The Type column shows whether the leave type is:

  • Paid

  • Unpaid

Use this to quickly confirm how each leave type is configured.

Edit a leave type

Select the three-dot menu on the right side of the leave type row.

Select Edit.

Update the leave type details, then select Save.

Check color warnings

When editing a leave type, the system may show a color warning if the selected color is very similar to another leave type.

For example, it may suggest choosing a more distinct color if it is similar to another leave type.

Use clear and distinct colors to make leave easier to identify in rosters.

Open Payroll Settings in Xero

Log in to Xero.

From the top menu, select Payroll.

Select Payroll settings.

This opens the Payroll settings area where you can manage pay items, leave, pay frequencies, holidays, and superannuation settings.

Open Pay Items

On the Payroll settings page, select the Pay Items tab.

From the left menu, select Leave.

This shows the leave pay items currently available in Xero.

The Leave table may show:

  • Leave Name

  • Leave Category

  • Units

  • Normal Entitlement

  • Leave Loading Rate

  • Shown on Payslip

  • Row action menu

Add a new leave pay item

Select Add.

Choose the correct leave type:

  • Paid Leave

  • Unpaid Leave

Select Paid Leave if the leave should be paid through payroll.

Select Unpaid Leave if the leave should not be paid.

Choose the leave category

In the Paid Leave or Unpaid Leave panel, select the Leave Category dropdown.

Choose the category that best matches the leave type.

Examples of paid leave categories include:

  • Annual Leave

  • Community Service Leave

  • Compassionate and Bereavement Leave

  • Defence Reserve Leave

  • Family and Domestic Violence Leave

  • Jury Duty Leave

  • Long Service Leave

  • Personal (Sick/Carer’s) Leave

  • Rostered Day Off

  • Special Paid Leave

  • Study Leave

  • Time Off In Lieu

Xero may automatically apply the ATO Reporting Category based on the selected leave category.

For example, Special Paid Leave may show as Other paid leave (Type O).

Complete the Xero leave details

Complete the required fields in Xero.

Add:

  • Leave Category
    ​     Select the correct leave category for reporting.

  • Leave Name
    ​     Enter the leave name. Use a clear name that matches or closely matches the leave type in Finance.

  • Type of Units
    ​     Enter how this leave is tracked, such as hours or the unit type used by your organisation.

  • Normal Entitlement
    ​     Enter the employee’s normal entitlement for this leave type, if applicable.

Review the available checkboxes:

  • Include in superannuation calculation
    ​     This may be selected automatically depending on the leave category.

  • Report as qualifying earnings
    ​     This may be selected automatically for Payday Super reporting.

  • Show Balance on Payslip
    ​     Tick this if the employee’s leave balance should appear on their payslip.

Select Add when finished.

Match the Xero leave item with the Finance leave type

After the leave pay item is created in Xero, return to Finance > Leave Types.

Create or edit the matching leave type in Finance.

Make sure the leave type settings match Xero where possible:

  • The Name should be easy to match with the Xero leave item.

  • The Paid setting should match whether the Xero item is paid or unpaid.

  • The leave type should be Active if it needs to be used in rosters, leave requests, or timesheets.

  • Assign the correct Xero leave item or finance assignment if the option is available.

Select Save when finished.

This helps ensure leave is tracked correctly in Finance and can sync correctly with Xero.

Important Notes

  • The Active toggle controls whether the leave type is available for use.

  • The Paid toggle controls whether the leave type is treated as paid or unpaid leave.

  • Leave type colours are used as fallback roster colours.

  • Choose distinct colours so staff and admins can easily identify different leave types.

  • If your finance integration is not connected, Xero or finance assignment options may not be available.

  • Xero leave categories can affect the ATO Reporting Category.

  • The ATO Reporting Category may be automatically applied by Xero and may not be editable.

  • The Paid or Unpaid setup should match in both Finance and Xero.

  • Use clear leave names so admins can easily match Finance leave types with Xero leave pay items.

  • Only tick Show Balance on Payslip if employees should see the balance on their payslip.

  • If Xero is not connected, the finance assignment or Xero leave item options may not appear in Finance.

Troubleshooting

  • If you cannot create a leave type, check that the required fields have been completed.

  • If a leave type does not appear after saving, refresh the page and check the search field.

  • If a leave type is not available for use, check that Active is enabled.

  • If leave is showing as unpaid, check that Paid is enabled for paid leave types.

  • If the colour warning appears, choose a more distinct colour.

  • If finance syncing is not available, connect the finance integration through Admin > Integrations.

  • If you cannot access Leave Types, check your permissions for Finance.

  • If you cannot see Payroll settings in Xero, check your Xero payroll permissions.

  • If the leave category is not available, make sure you selected the correct option under Add, such as Paid Leave or Unpaid Leave.

  • If the ATO Reporting Category cannot be changed, it may be controlled by the selected Xero leave category.

  • If the Xero leave item does not appear in Finance, refresh or re-sync the Xero integration.

  • If leave is syncing incorrectly, check that the leave type is set as Paid or Unpaid correctly in both Finance and Xero.

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