Holidays & Leave

Worked example on Xero

Jack joined the company on 5 August. He works 40 hours a week, which means he'll be entitled to 224 hours holiday each year (40 x 5.6 weeks per year). (For this part-year, he'll be entitled to 96 hours). The 'balance' shown is the 'hours the employee accrued prior to Xero'. In this case, it's 224-96 = 128.

His contract states that the company holiday year runs from 1 January. (Xero allows holiday to be accrued from 1 January, anniversary of employment, each pay period or each hour worked).

You can see that Jack has taken 40 hours holiday for a week in Majorca. That leaves him with 88 hours holiday to take by the end of the year. He'll see his holiday balance on Xero My Payroll or his Xero Me app, and be able to request further time off.

Holiday balance = entitlement - completed holiday (it does not reflect 'upcoming' or 'not yet paid' holiday).

Casual or Zero Hours workers

You cannot pay ‘rolled up’ holiday pay. Holiday pay can only be paid when annual leave is taken. You cannot include it in the hourly rate (known as ‘rolled up’ pay). Casual and Zero Hours workers are still entitled to 5.6 weeks holiday per year. (Read more at gov.uk)

You can set up holiday pay to be accrued at 12.07% per hour worked. This is 5.6 divided by 46.4. Your employees can then request holiday using the Xero Me app to be taken when they are not working.

Learn more about setting up time off entitlements at Xero Central.

Holiday Management

It's vital to proactively manage holidays to ensure everyone can take time off while you continue to meet your customer requirements. Here are our top tips:

1. Encourage employees to let you know as soon as they can about their holiday plans.

2. Monitor balances at least every quarter to ensure that holidays are being spread through the year (see below). This helps stop you being inundated by employees wishing to take their remaining annual entitlement towards the end of your holiday year.

3. Use the 'holiday calendars' if employees will routinely be given time off for bank holidays.

4. Check holiday balances at the start of each year. If you don't want unused holiday to roll over, update the figure by adjusting the opening balance.

What leave and pay are employees entitled to?

Find out more about various types of statutory leave and pay at gov.uk, including:

• Maternity

• Paternity

• Adoption

• Shared Parental Leave

• Parental Bereavement

• Sick Pay

1. Go to Payroll > Time Off

2. Click the request you want to approve

3. Check the hours to ensure they're correct for the number of days a week the employee works

4. Approve or Reject the request.

You can also edit time off requests, and add them on behalf of your employees.