XBert Type: Standard
Accounting Software: Xero
Country Restriction: Australia only
Risk Type: Payroll Risk
Business Function: Payroll
Overview
The "Employee Annual Leave setting incorrect" XBert finds active employees whose annual leave is set up not to be paid out when they leave the business. This setting affects final pay, so getting it wrong can lead to underpayments, unhappy staff and a Fair Work compliance breach.
What it does
This XBert:
Reviews the annual leave setup for each active employee in your payroll
Looks only at paid annual leave, using each employee's current leave settings
Flags any employee whose annual leave is set to "Not Paid Out" on termination
How it works
XBert checks every active employee who has paid annual leave. Annual leave should normally be paid out when someone leaves. If an employee's annual leave is instead set to "Not Paid Out" on termination, XBert raises one alert that lists all the affected employees so you can review and fix the setup.
To keep the alert accurate, XBert looks only at genuine annual leave. It ignores related leave categories such as annual leave loading, unpaid annual leave and annual bonus accruals, which are not paid out the same way. It also skips employees who are no longer active. Where your payroll runs through KeyPay or Employment Hero, these leave settings are not available in Xero, so this XBert does not run.
Example/Use Case
Bob is setting up payroll in Xero for Acme Pty Ltd. Every employee is entitled to annual leave, but Bob does not realise the leave type was created with "Not Paid Out" on termination. Months later, Priya resigns with 60 hours of accrued annual leave owing. Because of the setting, her final pay is short by roughly $2,400. XBert flags the incorrect setup before payday, so Bob fixes the leave type, Priya is paid correctly, and Acme avoids an underpayment breach.
Accounting software
Xero only.
Which countries it supports
Australia only.
Processes
This XBert falls under the Payroll business area. To resolve it:
In Xero, open the annual leave type for each flagged employee
Check the "Paid Out on Termination" setting on the annual leave pay item
Where annual leave should be paid out on termination, update the leave type so it is
Confirm the change flows through to the affected employees' leave setup
Once corrected, mark the XBert as resolved
Setting the correct payout treatment for annual leave helps prevent payroll underpayments and keeps you aligned with Fair Work and ATO reporting requirements.