Xero – Adjust Sick, Annual, Personal or Carers Leave Balance Accrued the Easy Way

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Each time you process a pay run in Xero, annual leave and sick leave accumulates for your employees. When an employee goes on leave, they should enter a leave request in Xero for the number of working hours they will be away. Once you approve the request and run the payroll for that period, your employee’s accrued leave balance will reduce by the number of approved leave hours.

If you forget to follow those steps, your employee’s leave balance will not reduce. When this happens, you will need to manually adjust the employee’s leave balance to reduce it to the number of hours that should remain accrued.

There are two ways you can manually adjust an accrued leave balance for an employee in Xero:

  1. The Easy Way: enter a negative opening balance to the employee’s leave balance
  2. The Best Way: post an unscheduled pay run that contains the amount of leave hours taken by the employee

In this tutorial we will go through The Easy Way. To learn about The Best Way, please go here.

The Easy Way to Adjust Leave Balances

This method manually adjusts the employee’s sick leave balance by entering a negative number into the Personal/Carer’s Leave section of their Leave Balances.

This is the quickest and easiest of the two methods, however it has one drawback: it does not leave an audit trail. Because of this, you should keep a record somewhere that explains why you made the adjustment and how you calculated the number of negative leave hours you posted.

To make the adjustment, go to Payroll → Employees in the main menu:

Click on the name of the employee you wish to adjust. In this tutorial we will select Oliver Gray:

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Click on the Leave tab to see the accrued balances of annual leave and personal/carer’s leave owed to Oliver:

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In the Leave Balances section we can see that Oliver has 5.8302 hours accrued of Personal/Carer’s Leave. To adjust this balance, click on 5.8302 Hours:

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You should now see an Edit Leave Type box. The Opening Balance section is where where you enter the number of hours to subtract from your employee’s sick leave. For this tutorial, we will reduce Oliver’s sick leave by three hours by entering -3 in the Opening Balance section. Be sure to include the minus sign in front of the number.

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Once you have entered the negative number, hit the Save button to be taken back to the Leave tab. Here you can see that Oliver’s sick leave accrual has been reduced by three hours to 2.8302 hours.

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Oliver’s sick leave balance has now been reduced by three hours by entering a negative opening balance. As mentioned, while this method is quick and easy, it is risky as it does not leave an audit trail.

The Best Way to Adjust Leave Balances

To find out how to leave an audit trail when adjusting sick leave balances, read my tutorial on The Best Way to adjust leave balances.

You’re All Set!

That’s it for this lesson. Find lots more helpful articles via the main menu or check out our main blog page here.