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.
Before you start
- Set up payroll, add employees and their opening balances.
- Decide how you will pay your employees and add their bank account information if you're paying your employees with BACS.
- Approve all employee time off requests and timesheets so they're included in the pay run.
Create a draft pay run
- In the Payroll menu, select Pay Runs.
- Select a pay period from the menu.
- Click Process Pay Run.
- Check and approve any draft timesheets.
- (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 or 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.
- From a draft pay run, click the employee who needs a pay adjustment.
- Click Add New [pay item] for the adjustment type you want.
- Enter an amount to add or deduct for the adjustment.
- (Optional) Click the Memo button and add a personal message on the employee's payslip.
- (Optional) Manually adjust tax for an employee's pay.
- Click Save and then click Close.
Post a pay run
- From the draft pay run, click Post.
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.
- Click Post to confirm your pay run.
Transfer funds to your employees' bank accounts
If you have set up your organisation to process payments by BACS, and have entered each employee’s bank account information, pay your employees by downloading the BACS file from payroll in Xero, and then import it using online banking.
- On the Payroll menu, click Pay Runs.
- Click the posted pay run period to download the payment file.
- Click Options and select Download BACS File.
- Save the file and import it to your online banking account.
After your bank makes the payments, you'll need to code the transaction to the wages payable account you selected during set up.
Now you are ready to send payslips to employees.