Add employee opening balances

Add employee opening balances (pay history) such as for earnings types, deductions, reimbursements, taxes, and pension contributions.

You only need to do this once, before the employee's first pay run if you:

  • Switch to payroll in Xero during a financial year.
  • Add a new employee who had a previous job in the same tax year.
  • Transfer an employee from a previous payroll part way through the tax year.
  1. In the Payroll menu, select Employees.
  2. Click the employee you want to add an opening balance for.
  3. Click the Opening Balances tab.
  4. Click Add Opening Balances.
  5. For new employees who had a previous job in the same tax year, enter their balances in Tax-Previous Employer.

    Add balances from your employee's P45 unless HMRC sent you a tax code notice with different balances.

  6. For employees who are switching from a previous payroll system, enter their balances in Tax-Current Employer.
  7. To add any other opening balances to the employee, click Edit for the type of opening balance.
    • Statutory pay
    • Student loans
    • Pension deductions
    • Previous payroll employee number
  8. Click Save.

You can update opening balances for Tax-Previous Employer after the first pay run for new employees who have a late P45.

Late P45 or starter checklist (gov.uk website)