Process a pay run

Create a draft pay run, make any adjustments to your employees' pay, then post the pay run in Xero to pay your employees.

Your payroll add-on includes 1 employee you can pay at no extra cost. If you pay more employees than this, you'll be charged for them on your next invoice. It's calculated on the number of unique employees posted in pay runs during Xero’s monthly billing cycle.

Pricing plans ( website)

Before you start

Before you create a draft pay run, make sure you've:

  • Set up payroll and added employees, entered opening balances.
  • Approved all employee leave requests and timesheets so they're included in the pay run.

Create a draft pay run

  1. Go to Payroll, then click Pay Runs.
  2. Select a pay period from the menu.
  3. Click Process Pay Run.
  4. Check and approve any draft timesheets.
  5. (Optional) In the Payslip Message field, enter a message to show at the bottom of all payslips.

Adjust an employee's pay

Adjust an employee's earnings, deductions, taxes, reimbursements, superannuation and leave before posting a pay run. For example, you can add to an employee's earnings by giving them a bonus or you can manually adjust their employee taxes.

  1. From a draft pay run, click the employee who needs a pay adjustment.
  2. Click + Add New [pay item] for the adjustment type you want.
  3. Enter an amount to add or deduct for the adjustment.
  4. If an employee has taken leave during the pay run period and you know what they would have earned if they had worked, you can adjust their Relevant Daily Pay leave rate. Otherwise, click Use Average Daily Pay.

    Sick leave, bereavement leave, public holidays, alternative holidays and employment-related education leave is initially calculated on RDP based on the employee's base rate. The rates for these can be edited, but you can't edit the ADP rate.

    Payment for other holidays and leave (Ministry of Business, Innovation and Employment website)

  5. (Optional) Click the Memo button Memo button and add a personal message on the employee's payslip.
  6. Click Save and then click Close.

Post a pay run

  1. From the draft pay run, click Post.
  2. Click Post to confirm your pay run.

After you've posted a pay run you'll need to pay your employees electronically, and then reconcile the payment with your wages payable account in the general ledger.

View the Journal Report by searching for the pay run payment date.

You might also be interested in