Set up custom pay items
Set up the types of earnings, deductions, leave, superannuation, and reimbursements your organisation plans to use for payroll.
How it works
- Pay items help customise and track the way you pay each employee. You can add the following kinds of pay items:
- Earnings are pay rates like wages, bonuses, or commissions.
- Deductions take payments out of your employees' pay to cover commitments like payroll giving or union fees.
- Reimbursements are for out-of-pocket or other expenses you reimburse employees for like travel allowances or contractor withholding tax. For example, use a mileage pay item with the rate per unit as $0.73. Each pay run, enter the number of kilometres the employee has driven in their pay template. Xero calculates the mileage and amount to reimburse.
- Leave pay items record any time off like bereavement or parental leave.
- Superannuation such as KiwiSaver.
- Separated payments are pay items used to split out wages and pay them from different cost centres.
- Assign recurring pay items (like deductions) to employees every pay run or add pay items to adjust their pay for a single pay period.
- Choose from default pay items loaded by Xero or add your own custom pay items, making sure you assign the account it records to in the general ledger.
Add a pay item
- In the Settings menu, select General Settings.
- Under Features, click Payroll Settings.
- Click the Pay Items tab.
Under Add, select the pay item type you want. For example, Regular Earnings.
- If you're creating an Earnings pay item and it's the employee's main source of earning, select Regular Earnings to see it in their Employment tab.
- If the Earnings pay item is for redundancy, select Other Gross Earnings to calculate holiday pay in the redundancy payment. Otherwise, select Withholding Income.
- Name the pay item and complete the other details as needed.
- Click Add.
- Repeat these steps for each custom pay item your organisation uses.