How many tracking categories can you have in Xero?

Four in the organisation, two of them active at a time. Xero's own API specification states that a line item carries a maximum of two tracking category elements, and the profit and loss report endpoint takes two tracking categories and no third, so the active limit shows up in the data and in the reporting rather than only in the settings screen.

Can I use a tracking category for funding source in Xero?

You can create one, and it will report. What it cannot do is carry the tax rate or pick the account, because a tracking option holds a name and a status. It also costs one of the two slots, which practitioner and location usually take. The canonical templates put the payer in the revenue account code instead.

Then how do I get a profit and loss by funder?

From the account codes. The allied health template opens a revenue account for each funding source it models, so a profit and loss by account is already a profit and loss by funder, with the Xero tax rate on each line. Add the practitioner tracking column and you get funder, practitioner and site in the same report.

Why does the service category beat the funder?

Because the map resolves a funder and a service category together before it falls back to the funder on its own. 11 revenue rows in the allied health template are reached only by that pair, which is how a report written for a plan managed client lands in the reports account rather than under the NDIS funder line. The template posts that row taxable and asks the practice and its BAS agent to confirm it, because a report funded in the plan as part of a therapy support is arguably GST free where the therapy is.

Will my practice system send a funder tracking category anyway?

Not from the mappings the vendors document. Cliniko keys on the billable item, product or practitioner, Zanda on the calendar or an option pre-assigned in its Xero settings, and Splose on the invoice item line with locations and practitioners as its tracking dimensions. None of them keys on who paid, which is the reason the split has to be made in the ledger.

Is Xero going to lift the two category limit?

There is an open product idea asking for more active categories and options. It sits at status in discovery with 244 votes and a Xero response dated 1 September 2026, so it is a live request rather than a shipped change. A chart built on the current limit does not have to be unwound if it moves.

Templates

Why funding source is not a tracking category

A tracking option carries a name and a status, not an account and not a tax rate, and Xero holds two active tracking categories. Who pays sets both the account and the rate: the same clinical hour is GST free for one payer and taxable for another. So the canonical templates put the funder in the revenue account code and spend the two slots on practitioner and location.

Key facts

What a tracking option holds: A name and a status, with no account field and no tax rate field on it⁶
How many an invoice line can carry: Two, which is stated on the line item, the journal line and both sides of a bank transfer⁶
What the payer decides: The revenue account and the Xero tax rate, because a supply to a business and a supply to a patient are not treated the same way⁷
Where the templates put the funder: In the revenue account code, with the two tracking slots left for the practitioner and the location⁹
How many templates hold that policy: All three canonical templates hold the same two slots and the same reason for them¹⁰
Rows a single label cannot reach: 11 of the 23 revenue rows are keyed on a funder and a service category together, so one option cannot pick the account⁹
Where a tracking filter works: The profit and loss and the balance sheet endpoints take tracking parameters, and the reports list carries no activity statement⁶
Whether the limit is contested: An open Xero product idea asking for more active categories sits in discovery with 244 votes¹²
What the settings screen holds: Four tracking categories in an organisation with two active at a time, reached in the Accounting menu under Accounting settings, then Tracking categories¹³

What a tracking option can hold

Start with the data model rather than the settings screen. In Xero's published API specification, a tracking category is a name, a status and a list of options, and a tracking option is a name. There is no account field on it and no tax rate field on it. It is a label, and a label is all it is.

Any LineItem can have a maximum of 2 <TrackingCategory> elements.⁶

The same sentence sits on the journal line, and a bank transfer carries the same cap on each side. So the two slot limit is not a settings screen preference a practice can talk its way around. It is the shape of the data, which is why an integration cannot send a third one either.

The payer is the third question, and there is no third slot

A clinic wants its ledger to answer three questions: who saw the client, where the work happened, and who paid for it. Two of them fit a label cleanly. The third does not, because it decides where the money posts and at what rate before anybody reports on it.

As at 3 Sep 2026
	What it decides	Can an option hold it	Where the template puts it
Practitioner	Who saw the client, and the payout that follows	Yes, the option is the practitioner's name	Tracking slot one
Location	Which site earned the work	Yes, the option is the site name	Tracking slot two
Funding source	The revenue account and the Xero tax rate	No, an option holds a name and a status	The revenue account code
Service category	Whether a report or a product overrides the funder account	No, and the same line has spent both slots	The revenue account code

Plate 1The contest for two slots, and what the canonical template does with the dimensions that lose it.

The template does not pick practitioner and location because they matter more. It picks them because they are the two cuts a label can carry without changing anything about the posting. The practitioner cut also drives payouts, and it cannot be rebuilt after the fact from an invoice that did not carry the name.

The payer moves the tax rate

This is the part a label cannot survive. The tax office decides a health supply on who engaged the practitioner, not on who did the work.

The recipient of the supply is whoever engages the health practitioner to provide the service. In many cases, this will be the patient. However, in some cases, it will be a business. Supplies of services by a health practitioner to another business are not usually GST-free.⁷

It cuts the other way too. Where an insurer, a statutory compensation scheme operator, a compulsory third party scheme operator or an Australian Government agency organises and pays for a service that would be GST free to the patient, the tax office says it stays GST free, and the parties may agree not to treat it that way. So one hour of the same clinical work reaches a different rate depending on who is on the other side of the arrangement.

In the canonical allied health template that shows up as 5 of the 18 revenue accounts defaulting to a taxable rate while the rest default to GST free income. A tracking option cannot carry either default, so a practice that puts the payer on a category still has to pick the rate somewhere else, line by line, from memory.

One label cannot pick the account

Even setting the tax rate aside, the arithmetic does not work. The template holds 23 revenue rows across 11 funding sources, and 11 of those rows are reached only by a funder and a service category together. A tracking option is one value on one line. Two keys do not fit in it.

The rows a funder label alone cannot reach, because the service category overrides the funder account⁹

Funder	Service category	Account the map picks	Xero tax rate
Private	Reports	420 Reports, assessments and medico-legal	GST on Income
Private	Supervision	421 Supervision, training and workshops	GST on Income
Private	Training	421 Supervision, training and workshops	GST on Income
Private	Products	422 Products and equipment sales	GST on Income
NDIS plan managed	Reports	420 Reports, assessments and medico-legal	GST on Income
NDIS plan managed	Supervision	421 Supervision, training and workshops	GST on Income
NDIS plan managed	Training	421 Supervision, training and workshops	GST on Income
NDIS plan managed	Products	422 Products and equipment sales	GST on Income
WorkCover	Reports	420 Reports, assessments and medico-legal	GST on Income
Employee assistance program	Cancellation fees	409 Employee assistance and corporate contracts	GST on Income
Employee assistance program	Group sessions	409 Employee assistance and corporate contracts	GST on Income

Read the table as a report and the problem is obvious: a plan managed report and a private report land in the same account at the same rate, and neither of them belongs in the funder line the practice owner is looking at. A funder tracking category would put both of them under the funder anyway, because the label was set on the invoice by whoever raised it. Two of the questions in that table are open rather than settled. Whether a report funded in a plan as part of a therapy support follows that therapy is a decision for the practice and its BAS agent, and supervision is contested on its own facts. The table prints the template default in both cases, and NDIS report writing and supervision carry the argument. The map needs the two keys to reach those rows either way.

The settlement side has nothing to label

The other half of a clinic's ledger is the money arriving, and this is where the funder label runs out. The template models 10 settlement rails, each with a clearing account of its own, because a bank line is produced by a rail rather than by a payer. One rail can carry several funders and one funder can arrive on its own rail.

Those legs post BAS excluded, because the tax question was settled on the revenue line that earned the money. A tracking option set to a funder name does not describe them, and a deposit that carries three funders in one figure has no single funder to set it to. The revenue split and the settlement split are two different splits, and neither of them is a label.

What the account codes give back

The report a practice owner wanted survives the move into the code. A profit and loss by account is that report, and it arrives with the tax rate already on each line.

Private: 400 Clinical services, private patients, at GST Free Income
Medicare bulk bill: 401 Clinical services, Medicare, at GST Free Income
DVA: 402 Clinical services, DVA, at GST Free Income
Health fund: 403 Clinical services, private health fund benefit, at GST Free Income
NDIS agency managed: 404 Clinical services, NDIS agency-managed, at GST Free Income
NDIS plan managed: 405 Clinical services, NDIS plan-managed, at GST Free Income
NDIS self managed: 406 Clinical services, NDIS self-managed, at GST Free Income
WorkCover: 407 Clinical services, WorkCover and workers compensation, at GST Free Income
CTP or TAC: 408 Clinical services, CTP and TAC, at GST Free Income
Employee assistance program: 409 Employee assistance and corporate contracts, at GST on Income
Other third party: 410 Clinical services, other third-party payers, at GST Free Income

With the funder in the code, the two slots stay free for the cuts that need them, and a practitioner column crosses every one of those accounts. That is a profit and loss by funder, by practitioner and by site at the same time, which is the thing the third category was being asked for. The full chart is on the allied health template page, and the setup steps for the two slots are on the Xero tracking categories how to.

What a practice system can actually send

There is a second reason the funder does not survive as a category, and it is upstream of Xero. The practice system has to be able to say which one it is on the invoice, and the mapping each vendor offers keys on something else.

What each practice system keys its Xero mapping on¹²³⁴

System	What the mapping keys on	Why the payer escapes it
Cliniko	A default sales account, with overrides by billable item, product and practitioner	One item such as a standard consult is paid by four funders in the same week
Zanda	One sales account, or the calendar mapped to sales accounts, with up to two tracking categories pre-assigned in its Xero settings screen	A calendar is a practitioner, and the pre-assigned option is the same on every invoice exported
Splose	Default accounts plus an account on each invoice item line, with locations and practitioners as tracking	The item line is the service, and the tracking dimensions offered are the two the template already spends

All services default to a single Xero account, which creates problems at tax time.⁵

The research behind this site records eight independent sources asking for revenue split by payer and none describing a practice system integration that does it. Accountants ask for the split, the integrations key on the service, and funding source is not a tracking dimension in the competing products either.

When a funder category still makes sense

This is a default, not a rule, and there are practices for which the trade goes the other way. Three of them:

A single site practice with one practitioner has both slots spare, so a funder category costs nothing that is being used. The tax rate still has to come from the account.
A practice reporting on a program rather than a payer, such as one funded contract run alongside private work, is describing a project rather than a payer, and the account codes can stay as they are.
A practice already carrying a funder category can keep it and add the accounts underneath, then archive the category options once the accounts are reporting. Archiving keeps the history readable rather than rewriting it.

What all three have in common is that the account code still carries the tax rate. The category is a reporting convenience on top of a chart that is already right, which is a different thing from asking a label to do the chart's job.

What Ledger Map does with it

Ledger Map holds one standing map for the practice, approved before anything syncs. A line resolves to its revenue account and its Xero tax rate through the funder and the service category together, which is the pair a single label cannot express, and the tracking slots stay where the templates put them: Practitioner on the first and Location on the second, both matched by name.

Where the map cannot resolve a line, it becomes a question with both candidate postings shown rather than a posting nobody chose. On the settlement side each deposit is posted as one balanced document set against the rail's own account, leaving one exact match in the bank feed for a person to accept. How it works shows the map and the approval step.

Questions

How many tracking categories can you have in Xero?
Four in the organisation, two of them active at a time. Xero's own API specification states that a line item carries a maximum of two tracking category elements, and the profit and loss report endpoint takes two tracking categories and no third, so the active limit shows up in the data and in the reporting rather than only in the settings screen.
Can I use a tracking category for funding source in Xero?
You can create one, and it will report. What it cannot do is carry the tax rate or pick the account, because a tracking option holds a name and a status. It also costs one of the two slots, which practitioner and location usually take. The canonical templates put the payer in the revenue account code instead.
Then how do I get a profit and loss by funder?
From the account codes. The allied health template opens a revenue account for each funding source it models, so a profit and loss by account is already a profit and loss by funder, with the Xero tax rate on each line. Add the practitioner tracking column and you get funder, practitioner and site in the same report.
Why does the service category beat the funder?
Because the map resolves a funder and a service category together before it falls back to the funder on its own. 11 revenue rows in the allied health template are reached only by that pair, which is how a report written for a plan managed client lands in the reports account rather than under the NDIS funder line. The template posts that row taxable and asks the practice and its BAS agent to confirm it, because a report funded in the plan as part of a therapy support is arguably GST free where the therapy is.
Will my practice system send a funder tracking category anyway?
Not from the mappings the vendors document. Cliniko keys on the billable item, product or practitioner, Zanda on the calendar or an option pre-assigned in its Xero settings, and Splose on the invoice item line with locations and practitioners as its tracking dimensions. None of them keys on who paid, which is the reason the split has to be made in the ledger.
Is Xero going to lift the two category limit?
There is an open product idea asking for more active categories and options. It sits at status in discovery with 244 votes and a Xero response dated 1 September 2026, so it is a live request rather than a shipped change. A chart built on the current limit does not have to be unwound if it moves.

Sources

Open questions

No search results snapshot exists for the templates family, so the current top five for this query, the People also ask set and whether an AI Overview shows are unrecorded. The questions answered here come from the manifest's secondary queries and from the pain point record in the corpus rather than from search data.
The often quoted ceiling of about one hundred options per category is not a ceiling. Xero's set up article puts 100 options per category as a guide for keeping reports quick, and the figure the API specification caps at one hundred is the character length of a category name and of an option name, which is a different fact again.
Whether the second slot should carry location, discipline or a funded program is a practice decision that depends on who reads the report. The templates spend it on location and the product exposes it as a setting rather than choosing for the practice.
This page uses the payer test only where the tax office states it plainly. The treatments the corpus leaves open, including supervision, NDIS report writing, time billed for therapy assistants and gift vouchers, are not settled here and are carried as confirmations for the practice's own BAS agent.

Integrate Cliniko with your Xero account
Cliniko. Retrieved 29 Aug 2026.
primary
Exporting to Xero
Zanda. Retrieved 3 Sep 2026.
primary
Set up the Xero integration
Splose. Retrieved 29 Aug 2026.
primary
Set up Xero tracking categories
Splose. Retrieved 2 Sep 2026. Source updated 18 Jun 2026.
primary
Automate Cliniko to Xero for chiropractic clinics
US Tech Automations. Retrieved 29 Aug 2026.
secondary
Xero Accounting API specification, tracking categories, line items and reports
Xero. Retrieved 3 Sep 2026. Source updated 30 Aug 2026.
primary
GST and health, recipient of the supply
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
GST and health, supply of services through a third party
Australian Taxation Office. Retrieved 3 Sep 2026. Source updated 12 Jun 2024.
primary
Allied health by funding source, the canonical template
Ledger Map. Retrieved 3 Sep 2026.
primary
NDIS provider, plan managed, the canonical template
Ledger Map. Retrieved 3 Sep 2026.
primary
Psychology with booking deposits, the canonical template
Ledger Map. Retrieved 3 Sep 2026.
primary
Tracking categories, increase the maximum number of active categories and options
Xero Product Ideas. Retrieved 3 Sep 2026. Source updated 1 Sep 2026.
secondary
Set up tracking categories
Xero Central. Retrieved 4 Sep 2026.
primary

Review

Last reviewed 4 Sep 2026 by Shane

General information for Australian allied health practices, not tax advice. Confirm a treatment with your BAS agent or accountant before you post it.

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