Set up pay history

Enter the detail of wages you've paid to your employee's during the current fiscal year, so the tax obligations are calculated correctly and the appropriate amount of tax is withheld on your Xero pay runs.

How it works

  • Use Xero's pay history as part of payroll set-up to make it easy to add pay history for each of your employees if you’ve been paying them elsewhere.
  • You’ll only be able to set up pay history before your process your first pay run in Xero.
  • Setting up your pay history means your tax obligations are calculated correctly and the appropriate amount of tax is withheld on your Xero pay runs. Xero will calculate the correct Social Security and Medicare based on taxable wages. This will also help when you get to year end.
  • You still need to make any FUTA payments outside of Xero.
  • We estimate that pay history will take you about 5-10 minutes per employee to complete. If you log out during set up, or your internet connection fails, Xero will save the data you have entered so far.
It’s easier to set up pay history as part of a new quarter, rather than part way through a pay period.

Before you start

You’ll need:

  • Pay check totals for each employee up until the end of the previous quarter (March 31, June 30, Sept 30) depending when you set up payroll in Xero
  • Current quarter paystubs, or a report of hours worked, for each employee.

Set up pay history before your first pay run

Once you’ve set up payroll in Xero, you’ll be prompted to set up pay history before your first pay run:

  1. Under Payroll, select Pay run. Xero will prompt you to set up pay history depending how you answered the question Have you processed payroll this year? during payroll setup.

  2. Select a payment quarter from the dropdown and click Confirm.

    Image of the Confirm button in the Pay History workflow.

  3. Follow the steps in the setup workflow to update pay history for each employee including:
    • Total amount paid (in dollar amounts) from the start of the year until the end of the past quarter. This includes pay items such as earnings, benefits and deductions with a tax impact.
    • Totals from earlier paystubs.
  4. Review a summary of your pay history including tax obligations based on your payroll totals. Click Edit to update this information if the totals are not what you expect.
  5. Add the total for any Federal Unemployment Tax Act (FUTA) liabilities you have accrued for the year. If you haven’t accrued a FUTA payment, enter 0.00 in the field under Federal unemployment tax.

Congratulations, you’ve finished payroll history! Click Go to Payroll Overview to return to your payroll dashboard.

View pay history once completed

Through the related pay run

  1. From the Payroll tab, click Pay runs.
  2. Select the pay run you’d like to look at.
  3. Click View payroll history.
  4. Click on individual employees to view details.

Through the employee details

  1. From the Payroll tab, click Employees.
  2. Click on the employee you’d like to look at.
  3. Select the Payroll history tab to view details.
If you want to update pay history after a pay run has been processed, you must reverse all pay runs to update the opening balances.

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