View payroll account balances and transactions, find and fix errors

Check your payroll transactions in the general ledger on a monthly basis or for year end and confirm the account balances are correct. Fix any reconciling or coding errors before filing your returns, or making tax deduction or other payments.

How it works

  • When you post a pay run, Xero creates entries in the general ledger payroll expense and payroll payable accounts (payroll payable accounts might be also called liability accounts). Xero uses the accounts entered in your Payroll Settings to do this.
  • Amounts posted to the payroll payable accounts will need to be paid to employees or other parties, for example tax payments. Before you do this, we recommend you check the amounts are correct.
  • After you’ve made your payroll payments and reconciled the transactions in your bank account, check that the payments are coded correctly.
If payments from your bank account are coded to your payroll expense accounts instead of your payroll payable accounts, the balances of the both accounts will be too high.

View payroll account balances

You can use the Account Transactions (New) report to see the balances of your payroll accounts.

  1. In the Reports menu, select All Reports.
  2. Under Accounting, click Account Transactions (New)
  3. Select your payroll accounts from the list.
  4. Select a date range, click Report Settings and include the Account Date, Code, Gross, Reference, Source, Type, Debit and Credit columns in the report.
  5. Select Account from the Group By list.
  6. Check the box Show Opening and Closing balances.
  7. Select Update.

The balances for the Wages, Tax deduction and other payable accounts for previous months should be 0.00 once each month’s payments have been made.

At the end of the financial year, the balance of the Wages, Tax deduction and other payable accounts should only represent the amounts that are not yet due for payment.

Check transactions and payments are recorded correctly and fix any errors

You can also use the Account Transactions (New) report to see your payroll account transactions.

  1. In the Reports menu, select All Reports.
  2. Under Accounting, click Account Transactions (New).
  3. Select your payroll accounts from the list.
  4. Select a date range, click Report Settings and include the Account Code, Gross, Reference, Source, Type columns in the report.
  5. Click Update to view the report.
  6. Review and confirm your transactions are coded to your payroll accounts correctly.
    • Wages and Salaries expense transactions created through Xero payroll should have Payroll Expense as the Source.
    • Payroll payable accounts should have two types of transactions once the payments are made and reconciled. Payroll Expense, recording the employee amounts payable and Spend Money transactions recording the payments made.
    • If you see transactions in your Wages and Salary expense account that have Spend Money as the Source:

      1. Click the transaction to see the details.
      2. If the transaction is for a wage payment made to an employee for a Xero payroll payment, edit the spend money transaction to change the account to the wages payable account. You could open the transaction in a different tab on your computer screen to do this.

      Image of the account transactions report.

    • Go back to the Account Transactions report and click Update to see the new account balances.