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'leave application does not calculate correct no of hrs' has been merged into this idea

Payroll & expenses: Payroll

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AU Payroll - Fixed amount leave requests for employees on a monthly salary.

Currently, for monthly employees, Xero does not take into consideration the fact that they have been set up to be paid the same amount each month, therefore the days in the month are meaningless from a pay perspective. Unfortunately, this means that the basis leave accrues on to work out how many hours a public holiday/personal/annual leave day should be when leave is entered is also meaningless. Instead of defaulting to 7.6 (or 8) hours/day leave taken, it does a calculation based on the number of working days in a month. So if someone is being paid on the basis of a 7.6 hour day & leave is also accruing on that basis, but they then take leave in a month that has 22 days, the default for the day's leave will be 7.27 hours.
Obviously, this can be overridden, but when someone doesn't know that this needs to be done, the leave taken is nonsense.
There should be an option to set how many hours/day an employee works so that the calculation defaults to this each time.

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

Hi everyone, we’ve been following the conversation around how Xero calculates leave request hours for salaried employees. As you’ve mentioned, the current calculation based on the working days in a month isn't hitting the mark for everyone.

We understand some of you would prefer an alternative calculation method and are manually adjusting leave requests so they reflect the exact amount of hours in a day.

While this feature isn't currently on our roadmap, we see the logic in your request. We've shared this idea with the product team and moved it to Accepted. We’ll keep you posted right here if anything evolves.

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  • Devika Tennakoon commented  ·   ·  Report

    In the leave applications, the system calculates the number of hours per day based on the monthly hours set up in the pay template, divided by the number of business days in that month. As a result, payroll staff must manually adjust each leave application to reflect the correct hours.

    For example, if an employee is full-time working 7.6 hours per day, with 164.667 hours per month, and the month has 22 business days, the system generates 7.4848 hours per day in the leave application. Manually correcting this for a large number of employees becomes very time-consuming.

    If the pay template included a field to specify the daily hours worked — and this value flowed through to the leave applications — it would significantly improve the system and save payroll staff a great deal of time.

  • Satbir Kaur commented  ·   ·  Report

    It's a very basic function. We should not be updating this manually, expect more from Xero. Hope this is fixed soon

  • Thomas Le commented  ·   ·  Report

    It's a very basic function. We should not be updating this manually, expect more from Xero. Hope this is fixed in the near future!

  • Karyn Agius commented  ·   ·  Report

    Related, and part of the cause, is that the number of working days per month adjusts the number of working hours per month - and displays it on the payslip. With a fixed monthly salary and a fluctuating number of hours worked the employee's hourly rate fluctuates. The leave hours are inextricably intertwined with this.
    I have had some success in the Demo Company by creating new leave categories for Fixed Amounts but for some reason it doesn't replicate in the live environment. And it doesn't fix the issue of the fluctuating hourly rate meaning each leave day has a different value.
    Monthly pay is not new, why is this not fixed yet?

  • Mellissa Matchett commented  ·   ·  Report

    Yes another way Xero has let us down unfortunately. We are sadly starting to wish we'd never moved to Xero Practice Manager.

  • James Stewart commented  ·   ·  Report

    Ridiculous that this cannot be done - every leave request has to be manually adjusted before being approved

  • James Angliss commented  ·   ·  Report

    Agree with this request and the comments below.
    It is important to be able to justify a calculation methodology to retain user confidence in the system and unfortunately this misses the mark. It is possible with this flaw that an employee would be prevented from taking their full 4 weeks of leave entitlement per year of work, thereby causing a NES breach.

  • Nicole Hammond commented  ·   ·  Report

    It would be good to see annual leave accrual and taken matched to the default in the settings rather than based on a 38 hour work week.

  • Jason Daskalopoulos commented  ·   ·  Report

    Fully agree with this request and surprise it has not been actioned despite this being raised over a year ago now. There is no reason why a 'day' of annual leave should cost 7.1 hours in one month and 7.8 hours in another month.

  • Janine Dawes commented  ·   ·  Report

    Yes agree, it's meaningless and causes extra work for payroll.
    Employees don't know or understand this methodology. They just apply for leave based on the dates, and get confused why the hours are higher or lower than expected.

  • Manoj S commented  ·   ·  Report

    Yes, agree here. Suggesting to consider a standard month days to derive the per day leave hours as 7.6 hours, instead of taking monthly business days which will be varying month on month.
    Overwriting facility is good but there are chances for the employees to miss it and maynot be practical every time.

  • Hannah Fong commented  ·   ·  Report

    Yes. This needs to be looked at improved to cause confusion to staff members who are concerned that their per-day leave hour is not correct. They expect to see 7.6 hour each time they apply for one day leave. They are concerned that higher than 7.6 hour per day is deducted, hence, adversely impacted on their final AL payout balance.

  • Annette Croot commented  ·   ·  Report

    I run a payroll in New Zealand on Xero and it just defaults to the set daily work hours, so I was surprised to see in the Aus Xero that it was breaking it down this way. It doesn't really make sense to divide it and change it each month its not in line which the accrual or how the daily hours are managed.

  • Jenny Dinh commented  ·   ·  Report

    Agreed, this is a time consuming process when there is a batch request during December Xmas period and any manual adjustments could be prone to human error.

  • Justina Strimaityte commented  ·   ·  Report

    Absolutely. As an admin, I need to always correct my employee's applications, and especially during the annual shutdown period it creates a lot of additional work, that is automated by other platforms.

  • Sarah James commented  ·   ·  Report

    I agree. Where employees are salaried and paid for the same number of hours each month, we should be able to set their leave rate to match their hours, i.e. employee is paid for 7.6 hours per day so one day of leave should be 7.6 hours. If an employee is part time 5 hours a day, we should be able to set their daily leave rate at 5 hours a day. Payroll admins have to waste time checking and updating leave to the correct amounts