How to Add a Sick Leave Request in Xero

Every week, someone on your team takes a sick day. That’s not a problem — it’s just reality.

The problem is when that absence doesn’t get recorded properly. Payroll runs short. Compliance slips. Managers are left guessing who was actually out and for how long.

According to the CIPD, UK employees take an average of 5.6 sick days per year, and research from the CDC puts US absenteeism costs at $225.8 billion annually for employers. Across the globe, untracked sick leave quietly drains businesses — not just in lost productivity, but in payroll errors and HR headaches that compound over time.

Xero makes this manageable. Once your leave settings are configured, logging a sick leave request takes under two minutes. This guide walks you through exactly how to do it — whether you’re managing it as an admin or submitting it as an employee.

What You Need Before You Start

Before you log a single sick day, make sure your Xero environment is set up correctly. Jumping straight to leave requests without this foundation is where most errors happen.

Here’s what needs to be in place:

• Leave types are configured — Xero won’t let you assign a sick day to a request if “Sick Leave” isn’t already defined as a leave type in your payroll settings.
• The employee is active in your payroll — Leave requests only work for employees who are linked to your payroll and have an active employment record.
• You have the correct permissions — Only payroll admins can manage leave on behalf of employees. Employees can submit their own requests if self-service is enabled.

If any of these are missing, fix that first. Everything else in this guide depends on it.

How to Add a Sick Leave Request in Xero (Step by Step)

Go to Payroll and Open the Employee Record

Log into your Xero account. From the main dashboard, navigate to Payroll in the top menu, then select Employees.

Find the employee who was sick and click on their name to open their profile. You’re now inside their individual employee record — this is where all leave is managed.

Navigate to the Leave Tab

Inside the employee record, look for the Leave tab. Click it.

This screen shows you a full history of all leave taken or approved for that employee. You can see outstanding balances, previous requests, and any pending approvals. It’s your single source of truth for that person’s time off.

Click “Add Leave Request”

On the Leave screen, click the “Add Leave Request” button. A new form will appear asking for the following:

• Leave type — Select “Sick Leave” from the dropdown.
• Start date — The first day the employee was absent.
• End date — The last day of the absence.
• Description — Optional, but useful for internal records. A short note like “Called in sick — upper respiratory infection” keeps things clean.

Fill in the details accurately. Xero calculates the number of leave days automatically based on the date range and the employee’s work schedule.

Review the Leave Balance

Before saving, check the leave balance section that appears on the same form. Xero will show you how many sick days the employee has accrued and how many they’ll have remaining after this request is approved.

74% of employees say they have taken sick leave despite feeling they shouldn’t (CIPD Global Workforce Report), which means leave balances need to be accurate — not just for payroll, but for genuine workforce planning.

If the balance looks off or you see a zero balance where there shouldn’t be one, check your leave accrual settings before proceeding.

Save and Approve

Once everything looks right, click Save. Depending on your workflow, the request may need to be approved.

To approve it, go back to the Leave tab or navigate to Payroll > Leave Requests and find the pending request. Click Approve.

Once approved, the sick leave is locked into the employee’s payroll record and will be reflected in the next pay run automatically.

How Employees Can Submit Their Own Sick Leave Request

If you’ve enabled Xero Me (Xero’s employee self-service app), employees can submit their own sick leave without going through HR every time.

Here’s how it works from the employee’s side:

• Open the Xero Me app or log into the Xero Me web portal.
• Tap Leave from the bottom navigation bar.
• Select Request Leave.
• Choose Sick Leave as the leave type.
• Enter the start and end date, add a note if needed, and hit Submit.

The request then appears in the payroll admin’s queue for review and approval. Managers get a notification, approve or decline directly in Xero, and the employee is notified automatically.

This is one of the fastest wins available in Xero. Studies show that self-service HR tools reduce admin time by up to 40% (McKinsey) — and for small businesses where one person is often doing everything, that time adds up fast.

How to Edit or Delete a Sick Leave Request

Mistakes happen. An employee gives you the wrong dates. A leave request was submitted twice. Here’s how to fix it.

To edit: Go to the employee’s Leave tab, find the request, and click on it. If the request hasn’t been included in a finalised pay run yet, you’ll see an option to edit. Change the dates or description as needed and save.

To delete: Open the same request and look for the Delete or Void option. If the leave was included in a pay run that’s already been finalized, you may need to revert the pay run first before you can remove the leave record.

This is where it’s worth being precise from the start. Payroll errors cost companies significant time and money — the American Payroll Association reports that payroll errors cost businesses an average of 1-8% of their total payroll per year. Small inaccuracies in leave tracking are a common contributor.

Sick Leave vs. Unpaid Leave — Know the Difference in Xero

One of the most common mistakes when adding leave in Xero is selecting the wrong leave type.

Sick leave is usually a paid entitlement — it draws from the employee’s accrued balance and is processed at their normal pay rate. Unpaid leave is different. It deducts pay for the period of absence without touching any accrued balance.

In Xero, if you accidentally record a sick day as unpaid leave, the employee may not get paid correctly for that period, and their sick leave balance won’t be adjusted. That creates two problems at once.

When you’re filling in the leave request form, always double-check the leave type dropdown before saving.

Setting Up Sick Leave Entitlements in Xero (If You Haven’t Yet)

If sick leave requests aren’t showing up or the leave type isn’t available, your leave entitlements probably aren’t configured yet. Here’s how to set them up:

Go to Payroll Settings, then Leave Types. Click Add Leave Type and fill in:

• Name: Sick Leave (or whatever naming convention you use)
• Type of units: Days or hours — match it to how your business tracks time
• Accrual method: Whether leave accrues per pay period, annually, or upfront at the start of the year
• Leave loading: Only relevant in some regions (e.g., Australia) — check local requirements

Once saved, this leave type becomes available for all future leave requests. You’ll also need to apply the entitlement to individual employees under their Employment tab to make sure they start accruing correctly.

Over 3.5 million businesses use Xero globally as of their latest figures — and the majority of support tickets related to payroll errors trace back to leave configurations that were never properly set up in the first place. Get this right once and you won’t have to touch it again.

Common Errors When Adding Sick Leave in Xero

Even with a clean setup, a few issues come up regularly. Here’s what to watch for:

“No leave type available” when creating a request — This means sick leave hasn’t been configured in Payroll Settings yet. Go to Leave Types and add it.

Leave balance showing zero when it shouldn’t — Check the employee’s leave entitlement settings. The accrual may not have been applied to their profile.

Leave not appearing in the pay run — Make sure the leave request is approved, not just submitted. Xero only pulls approved leave into payroll.

Dates calculating incorrectly — Xero calculates leave based on the employee’s work schedule. If their work schedule isn’t set up correctly (e.g., they work four days a week but Xero thinks they work five), the day count will be off.

Can’t edit a leave request — The pay run that covers that period has likely been finalized. You’ll need to revert the pay run before making changes.

Why Accurate Sick Leave Records Matter More Than You Think

This isn’t just about keeping tidy records. There are real business consequences to getting it wrong.

Lost productivity from untracked absence costs UK businesses alone an estimated £77 billion annually (CIPD). That’s not the sick days themselves — it’s the downstream effect: missed handoffs, unplanned workload redistribution, and managers making decisions based on incomplete information.

For businesses with more than 10 employees, the complexity multiplies fast. Without a system like Xero to centralise leave management, teams rely on spreadsheets, calendar notes, and memory. Companies using automated payroll and leave management software reduce payroll processing time by up to 80% compared to manual methods (Deloitte).

Getting sick leave into Xero accurately means your payroll is right the first time, your HR reporting is clean, and your compliance obligations are met — without anyone having to chase the details.

Conclusion

Adding a sick leave request in Xero is straightforward — but only if your leave types are configured and your employee records are set up correctly. Get that foundation right, and every future sick day gets logged accurately, feeds into payroll without manual intervention, and creates a clean record your team can rely on.

The biggest cost isn’t the sick day itself. It’s the payroll error, the compliance gap, or the management decision made on incomplete information. Absenteeism costs US employers $225.8 billion annually — and a significant portion of that burden is administrative, not unavoidable.

Use Xero the way it was designed to be used: as a system that runs quietly in the background so your team doesn’t have to think about it. Set it up once, approve leave as it comes in, and let the automation handle the rest.

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