Xero monthly payroll has a bug with the defaults, when creating a leave request. Unfortunately, this issue can only be fixed by Xero.

Xero is calculating leave request hours based on actual hours in the month, but it should use standard hours per day averaged… which for some companies doing monthly payroll would be 8h per day (8h per day * 5 days per week * 52 weeks / 12 months = 173.3333h). 

Say an employee has taken leave for 2 days. They would expect to see 16h in the leave request, however they see:

Sadly, this bug has been present for +7 years and there has been heated debates… Xero has acknowledged the issue, but no fix has been implemented. 

1. https://central.xero.com/s/question/0D51N00004xkCU7SAM/setting-default-hours-for-leave
2. https://productideas.xero.com/forums/939198-for-small-businesses/suggestions/45126628-au-payroll-leave-requests-for-part-time-workers-t
3. https://central.xero.com/s/question/0D53m00008es7vzCAA/leave-application-hours-calculation

The problem with the above is that the bug can cause incorrect leave requests. While it can be manually overwritten by the accountants, it does not offer great user experience.

Note: You could fix it by adding a dedicated package like Employment Hero (or another HR app) – such apps can process leave requests within the HR app itself and then send the leave request into Xero

Xero does not provide an option to disable Leave Requests in Xero Me. We would like to request such a feature.

1. Please add feature to disable Leave Requests in Xero Me