Add a deduction for an employee

Add a deduction pay item for an employee then add it to their pay template. Xero then calculates the employer contribution for reporting.

  1. From Settings, select General Settings.
  2. Under Features, click Payroll Settings.
  3. Click the Pay Items tab and click Deductions.
  4. From Add, select the type of deduction.
  5. Enter a unique name for the pay item (this will show on the employee's paystub).
  6. Enter the other deduction details including the liability account.
  7. Click Add.

You'll need to add the deduction pay item to the employee's pay template.

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