Setting up Payroll in XERO

There are few steps given below for setting up Payroll in Xero.

  1. Firstly, the most obvious one up the top we have the payroll tab with different areas. Now, this is mainly for processing payroll before you do so if any configuration under settings, you can find payroll settings. So that’s what we’re going to click on.
  2.  So here we are in the payroll settings section in Xero, once you’re in the payroll settings section, you’ll see tabs along the top. 
  3. Now start with organization settings. We have our linked accounts for PAYG wages expense payable superannuation liability and expense along with the link bank account for processing payroll. It’s important to choose the right bank account here because this is used for ABA files you upload to make batch payments for employees as well.
  4. Now If you choose to do so come in here and configure those accounts Xero uses wages payable as the default wages payable account, which means once a Pay Run is processed. For example, you press up a run for $1,000 that is now needing to be paid to employees $1,000 will be Credited to the wages payable account, and when you pay that a thousand dollars out of the bank account should be this one here. You can allocate it to the wages payable account and that’ll bring the balance down to Xero which shows you’ve paid everything going from that payroll. 
  5. Below that section, we have payroll tracking categories that can be turned on under general settings and tracking for further breakdown for expense analysis and timesheet categories as well. 
  6. We’ve then got out payslip options so you can show annual salary and employment bases on the employee payslips and you can upload a logo here as well. If you’d like to display on payslips just to give it that professional touch. 
  7. Once you’re done, make sure you click save in the bottom right-hand corner and you’ll get the banner along the top then we can move on to calendars pay calendars. We used in zero to set up the different wage frequencies. So if you have weekly employees fortnightly or monthly etc.
  8.  This is where you set up those calendars so you can see them here. We’ve got a few fortnightly for specific employees monthly weekly casuals. A weekly calendar to add a new page calendar you click this button on the right-hand side. We choose the frequency given a name. On the start date will just choose Monday and the first payment date. For that pay run as well.
  9.  Once you’re done with that, you can simply click add and it will appear here on this list. And next up we have the holidays top. So holidays are pretty straightforward Xero uses its own holidays Linked from basically the different state governments to show when there’s a public holiday at playing. So if you have an employee he must take a week’s leave if they have a holiday public holiday during that time and you’ve linked the holidays for their state under the employee. 
  10. So under payroll and employees, you can choose a holiday category. So there is Victoria employee which is Victoria for example, and that means what they take the week’s leave it won’t include the public holiday in that leave balance because they would have got that time off. It is so very handy. Make sure you have added your holidays to each employee for the correct state. 
  11. The next step is Pay items. So this is our main one here and what you’ll see is the different categories. We’ve got overtime ordinary hours and allowances. Because the toxins tab things like during interphase child support and FBT etc. reimbursement stabbed and leave so you can set up the different types here Xero will default with all the main categories for you. So you don’t have to worry too much if you want to add one. For example, let’s say, you know, the earnings category we didn’t have over time. I’m at the up top, right? Choose Overtime earnings to give it a name so overtime and all the same example displayed name will be overtime for the payslips rate  We’ll do a multiple of the employee’s ordinary earnings rate and 1.5. So Xero will automatically calculate 1.5 times the ordinary rate that you set for the employee for this overtime earnings expense account, we are just going to put it in the wages and salaries expense account and Exempt it from super once I add that and you will see special overtime for the example added down the bottom and it’s a simple as that.
  12. Now, the last tab you need to know about is the superannuation which contains all the superannuation funds for each employee that you have added in if you need to add a new one simply click add superannuation fund. Type in the name and put in the employer number where necessary you got the different types of the top here to whether it’s regulated or self-managed Superfund. You have these options to choose from so make sure you’ve added everything you need to in the payroll settings and zero before you proceed to set up employees.

Leave a Reply

Your email address will not be published. Required fields are marked *