Add a pay run and pay employees

Create a scheduled pay run then if you need to, adjust your employees’ pay. When you're ready to pay your employees, complete the pay run to pay them in Xero and calculate your taxes. You can't delete the pay run once it's complete.

Before you start

  • Set up payroll, add employees and their opening balances.
  • Add a pay schedule and set up employee pay templates. Pay schedules let you add a pay run to a period in the pay period cycle. Pay templates contain the employee's base pay details. Without a template, you’ll need to add the employee’s pay details manually.
  • Decide how you'll pay your employees.
  • Register for direct deposit if you're using this payment method and add each employee’s bank account information.
  • Approve all employee time off requests and timesheets so they're included in the pay run.
You can only have one draft pay run per pay schedule. You can adjust previous payroll payments to fix an error or to pay your employee outside the usual cycle.

Process a pay run and pay employees

  1. In the Payroll menu, select Pay Runs.
  2. From New Pay Run, select a pay schedule.

    Image of new pay schedule selection

  3. Click Process Pay Run.
  4. Review the pay run details and employee payment methods.
  5. (Optional) In the Paystub Message field, enter a message to show at the bottom of the paystubs for all employees in the pay run.
  6. Click each employee’s name to view their paystub and check their pay details.
  7. (Optional) Adjust an employee's pay.
  8. (Optional) Click the plus icon Image of the plus icon. to add a personal message to the individual employee's paystub.

    Image of the 'add memo' button for an employee's paystub.

  9. Click Pay Employees.

    If you see either of these messages:

  10. Click Complete Pay Run.

Completing the pay run starts payment for the selected employees (depending on their payment method) and creates payroll tax invoices. If they're paid electronically by direct deposit, Xero pays them automatically. If they're paid by check, Xero downloads their checks for printing. If you pay your employees manually, you'll need to to arrange payment to them yourself.

Once you've completed a pay run, you can send paystubs to employees. Depending on the payment method you use, you'll also need to reconcile the payroll payments in your bank account.

You can run the Journal Report for the pay run date to view the pay run journals.