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 5 employees 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, added employees, entered opening balances, and determined employee payment methods.
  • Added each employee’s bank account information if you're paying your employees with BACS.
  • Approved all employee time off 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. (Optional) Click the Memo button Memo button and add a personal message on the employee's payslip.
  5. (Optional) Manually adjust tax for an employee's pay
  6. Click Save and then click Close.

Post a pay run

  1. From the draft pay run, click Post.
  2. If you've set up automatic enrolment for your pension scheme, we'll post an alert to let you know if you should enrol any employees before you complete the pay run. You can either:

    • Choose to postpone their enrolment for up to 3 months, by selecting a date in the Postponement Date field. Then click Save & Review.

    • Choose to enrol the listed employees, by leaving the Postponement Date field blank. Then click Save & Review. This will apply default pay items to the employees and a whole period pension deduction will be calculated for both employee and employer in this pay run.

      Alert that appears if there are employees elligible for auto enrolment.

  3. Click Post to confirm your pay run.
Posting a pay run automatically submits RTI filings to report your employees' pay to the government. You can view the Journal Report by searching for the pay run payment date.

To see how much you contribute to each employee's pension scheme and how much you will need to pay your pension provider, view and print a Pension Contribution Report.