Prepare for payroll in Xero

Collect all your organisation and employee information, then get payroll admin access before you set up payroll in Xero.

  1. Check your pricing plan
  2. Collect organisation's payroll information
  3. Collect your HMRC reference and office numbers
  4. Collect your employee's payroll information
  5. Get Payroll Admin access

Check your pricing plan

Make sure you already have payroll in your pricing plan (xero.com website) or change your Xero pricing plan to include it.

Collect your organisation's payroll information

Payroll accounts

  • Bank account you will use to pay employees
  • Wages payable and expense accounts
  • PAYE and NIC liability accounts
  • Employer NIC account
  • (Optional) BACS Service User Number (SUN)

Pay calendars

  • Pay period frequency, such as weekly, fortnightly, 4 weekly, monthly, quarterly, or annually.

Pay items

  • Earnings, benefits, deductions, reimbursements, time off, and earnings orders that make up your employees' pay
  • Expense or liability account for each item

You may also need to provide:

  • Workplace pension information for auto enrolment
    • Pension provider contact information and SCON
    • Pension administrator contact information
    • Workplace pension type
    • Employee's and employer's pension contribution amount
  • Public holiday calendar to pay employees for public holidays
  • Xero tracking categories if you want to produce payroll reports for employee groups

Collect your HMRC reference and office numbers

  • Employer PAYE reference
  • Accounts Office reference
  • RTI credentials (User ID and Password to log into the government gateway)

You may also need to provide the following HMRC reference numbers:

  • Corporate Tax (COTAX) if you are a limited company
  • Employer Contracted-Out (ECON)
  • Self-Assessment Unique Tax (SA UTR) if you are a sole trader
  • Small Employers Relief (SER) if you are eligible to claim additional statutory maternity, paternity, adoption and shared parental pay in your Employer Payment Summary (EPS)
  • Employment Allowance if your business or charity pays employers’ Class 1 National Insurance

Collect your employee's payroll information

Employee personal and contact details

  • Contact information and home address
  • Email address to invite them into Xero's My Payroll (to view their pay information, and submit time off requests and timesheets)
  • (Optional) Emergency contact information

Employment details

  • Start date
  • National Insurance number
  • NI Category
  • Payroll calendar the employee belongs to
  • Salary or wage details
  • Tax information
  • Time off and accrual details
  • Employee payment method
  • Employee number
  • Pay template information for each employee if any employee has recurring pay items for each pay run, such as student loans or earnings orders

Get Payroll Admin access

Ask your Payroll Admin to set up a new user with Payroll Admin access, or if you're the Subscriber (the one who set up the Xero account), you already have Payroll Admin access and you can start setting up payroll now.

  1. In the Settings menu, select General Settings.
  2. Under Features, click Payroll Settings.
  3. Under Organisation, click Users.
  4. Click the name of the person responsible for managing payroll.
  5. Select the Payroll Admin checkbox.
  6. Click Save.