AU Payroll - Automatically exhaust paid leave before unpaid leave is applied
Payroll - Auto calculate the leave entitlement on employee including the accrual from the current pay period to exhaust all leave before unpaid leave is applied.

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Elaine Robinson commented
Yes please, this is also an issue in the UK. Staff are being paid less than they are due as Xero calculates back from an average monthly hours and takes off the unpaid element first - this is incorrect it should do the paid hours first,