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.

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

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

4. Click Exempt. The Entitlements Exemptions window appears.

   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.

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

When you process the employee's pay:

• Enter the number of hours taken against the Unpaid Leave wage category.
• Remove all Base Salary or Base Hourly amounts to ensure the Net Pay is $0.00

Here's an example where 40 hours of unpaid leave is being recorded.