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'UK Payroll: 52 week averaging for holiday pay' has been merged into this idea

Payroll & expenses: Payroll

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UK Payroll: Reporting - Run a report to calculate holiday pay based on a 52 week average

It would be really useful for those of us in the UK if we could run a report to calculate holiday pay based on a 52 week average. Legally this has been a requirement since 2020.

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Michelle Lockwood shared this idea  ·   ·  Report…  ·  Admin →
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Accepted  ·  AdminDavid Reynolds (Admin, Xero) responded  · 

Hi everyone, thanks for sharing how important automated holiday pay calculations are for you.

We’re updating the status of this idea to Accepted to show it's formally on our radar.

While we’ve already explored several options to automate holiday pay calculations, for the time being this is not a feature we have planned in our roadmap.

We understand some of you are managing these calculations manually. We’d suggest running the Payroll Activity Summary or Gross to Net report over a 52 week period to assist with these calculations.

We’re grateful for your feedback and will continue to monitor interest here.

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  • Kat Pepper commented  ·   ·  Report

    It is surreal to me that this has still not been addressed and yet there has recently been an update for minimum wages within Xero. I have had to look at other software such as BrightPay / BrightHR as they offer this as a part of their software! How are there not more UK customers reporting this issue?!

  • Ana Rodrigues commented  ·   ·  Report

    This is now an urgent requirement as in order to comply with the law we are obliged to pay employees holiday pay based on the average total hours worked including overtime.
    This is not easy as Xero doesn't even produce reports with the necessary figures to perform the calculations.
    Thank you

  • Lorna Haines commented  ·   ·  Report

    Please could this feature be progressed again? Like the others here, I'm very keen to have this calculation automated, to avoid hours of manual work each month. I rely on Xero Payroll being in line with UK legislation and this 2020 law change was not clear to me until recently. I don't remember getting any notifications from Xero or any help with calculating leave pay. The leave feature in general is poor. For example there is no tracking of changes (with reasons) to opening leave balances, and there is no report for current leave balances. I too am starting to look elsewhere for better software. Thankyou for your consideration.

  • Kat Pepper commented  ·   ·  Report

    I don’t understand how this isn’t a higher priority. Every single payroll user in the UK requires this by law, and we’re currently having to calculate it manually. There’s been no update since August 2024 — can we please get some clarity on when this will be addressed?

  • Kat Pepper commented  ·   ·  Report

    Has anyone heard any updates from Xero about this being adapted for the UK?
    Specifically, I'm wondering if there's been any progress on making it possible to calculate average holiday pay based on the previous time period.

    I've been searching for a better solution for over a year now. At the moment, I’m still stuck manually calculating everything in a spreadsheet and making individual adjustments each month for each employee — it’s incredibly time-consuming.

    I keep hearing that systems like BrightPay and BrightHR can handle this automatically. Has anyone had any luck with Xero introducing something similar, or found a good workaround?

  • Jane Keveren commented  ·   ·  Report

    I would have thought that something that has been a legal requirement since 2020, should have the highest priority

  • Sarah Tranter commented  ·   ·  Report

    Any update on this? We may need to move to other accounting software if this is not going to be introduced very soon.

  • AdminKelly Munro (Community Manager, Xero) commented  ·   ·  Report

    Apologies about the Calendly invite link issues, everyone. We've just updated this in my post and you should now be able to find dates in June to book in. Thanks, and we appreciate your interest in feeding back to the team! 🙂

  • Jan Thompson commented  ·   ·  Report

    This would really be so useful, and would certainly be a contributing factor for me to move payroll software if it is not made accessible soon. As a legal requirement that has been in place in the UK for the last 4 years it is an absolute necessity.

  • Nicola McGuinness-Bell commented  ·   ·  Report

    This has been a legal requirement in the UK since 2020 and is CRITICAL as a feature for Xero payroll.

    Please look into this URGENTLY!!

  • Martina Ford commented  ·   ·  Report

    No they haven’t and no idea if or when. I gave them a low rating on Trustpilot and they told me that we could manually adjust pay. Same for Smartpension..

  • Carol Dawson commented  ·   ·  Report

    Have Xero updated any of their reports ot include average holiday pay reporting?

  • Kim Blackwell commented  ·   ·  Report

    Hi,
    I also fully support this idea and am also surprised that this is not a feature of Xero given that it has been a legal requirement in the UK.

    Is this planned in XERO for the future? Those of us that use XERO for our payroll need this facility and as it is a legal requirement I would have thought this would be a priority.

  • Sharon Pattison commented  ·   ·  Report

    Hi

    I fully support this idea and am surprised that this is not a feature of Xero given that it has been a legal requirement in the UK since 2020.

  • Darren Fullthorpe commented  ·   ·  Report

    This lack of functionality is stopping our client using Xero payroll , so going elsewhere !!

  • Louise Christie commented  ·   ·  Report

    As this is a legal requirement it makes sense that our payroll software is up to date and in line with current legislation, and be able to do this calculation.

  • Martina Ford commented  ·   ·  Report

    It doesn't look as if anyone at Xero is interested. Legal requirements should be included in the system asap after being announced

  • Rachael Watt commented  ·   ·  Report

    It would be substantially beneficial to have the ability to run a report to calculate holiday pay based on 52 weeks of working rather that manually calculating and having a larger margin for error and possible penalties. In the UK this has been a legal requirement since 2020.

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