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You can set up a new wage category to record an employee's unpaid leave. This lets you enter the unpaid leave hours on the employee's pay, and provides a means of reporting on unpaid leave.

Let's take you through it.

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title	1. To create the unpaid leave wage category

Create a new wage category for the unpaid leave.

Name the category based on the type of leave.
Select Hourly as the Type of Wages.
Select the option Fixed hourly rate of and leave the rate as $0.0000
Click Employee to select the employee taking the unpaid leave.

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title	2. To prevent entitlements accruing during unpaid leave

Depending on your employment agreement, you might need to prevent entitlements from accruing during unpaid leave. For example, an employee might not be entitled to accrue personal leave while taking unpaid leave. To clarify your leave obligations, visit the Fair Work website.

To prevent an entitlement accruing during unpaid leave

Go to the Payroll command centre and click Payroll Categories.
Click the Entitlements tab.
Click the zoom arrow next to the entitlement.

Click Exempt. The Entitlements Exemptions window appears.

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Exempt button greyed out?

This means the entitlement accrues by a set number of hours (instead of a %) and can't be modified here. Instead, you'll need to manually change the accrued hours to zero when recording the unpaid leave.

Select the Unpaid Leave category created earlier.
Click OK then click Close.

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title	3. To record unpaid leave

When you process the employee's pay, record the number of unpaid hours taken against the Unpaid Leave wage category. Depending on how much of the pay period is unpaid leave, you'll also need to modify other amounts on the employee's pay.

If the unpaid leave is for	Do this
the entire pay period

is unpaid leave

Remove all other hours and amounts to ensure the Net Pay is $0.00

Here's an example of 40 hours unpaid leave.

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If only

a portion of the pay period

is unpaid leaveFor employees paid an hourly rate,

(hourly based employees)

reduce the Base Hourly hours by the number of unpaid leave hours.

Here's an example of 8 hours unpaid leave which reduces the Base Hourly from 40 hours to 32 hours.

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For salaried employees, reduce

a portion of the pay period (salaried employees)

Reduce the Base Salary amount to cater for the unpaid leave. You can calculate this by checking the employee's hourly rate and multiplying it by the hours of unpaid leave taken.

Here's an example of 8 hours unpaid leave which reduces the Base Salary amount.

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<h2><i class="fa fa-comments"></i>  FAQs</h2><br>

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title	How do I track how much unpaid leave has been taken?

To see how many hours of unpaid leave has been taken by an employee, run the Payroll Activity (Detail) report (Reports > Index to Reports > Payroll > Employees > Activity Detail).

You can specify a date range for the report and filter it for one or more employees.

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