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Payroll in Xero – July Update

Posted 4 years ago in Advisors by Oliver Furniss
Posted by Oliver Furniss

Today we’ve released the latest changes to payroll and we also wanted to take this opportunity to share with you whats coming soon as we continue to see increased usage of payroll in Xero.

US Payroll

You’ll notice an updated Payroll Overview design that shows what needs your attention – time off requests or timesheets that need approval or pay runs that need paying. We’re also showing Taxes & Filing obligations to ensure you file and pay your payroll taxes on time. Overdue obligations are always shown as well as upcoming filings or payments. The overview header bar provides you with quick links to common tasks like adding a new employee and other useful information around your payroll.

US Payroll Overview

We’ve also updated the Employees list, New Employee and Employee Details screens to improve the flow and make them easier to navigate. The employee header now provides easier navigation between employees as well as their photo or initials. As we update the remaining screens for the employee this header will become a common experience.

When you first access payroll for a new business you’ll notice a quick setup guide. These five tasks must to be completed before you can process a pay run. Once completed it disappears and the overview screen is visible. This is the first step of many on improving your payroll getting started experience.

US Get Started Guide

For full details please check out our release notes.

Coming soon to payroll

General ledger integration is coming soon for Australian payroll. Transactions from payroll will seamlessly flow through to, and impact the general ledger immediately – the way it should be. This means that we’ll be restricting the ability to revert any pay run after this is released. We’ll only allow the most recently posted pay run per payroll calendar to be reverted.

And there’s more

  • Federal e-pay for US payroll to allow for the payment of payroll taxes.
  • Australian payroll will get updated screens and flows including the payroll overview, employee list, a localised setup guide and much more.
  • Employee Notes to capture important notes and comments against payroll employees.
  • Updates to applying for managing and approving employees leave/time off.

Modern browser support

To continue to deliver the best experiences, our teams need to make use of new capabilities available in modern browsers. Older browsers just don’t have the technology to provide you with the same high-quality experience. From September 1st, Xero will no longer be supporting Internet Explorer 8.

If it’s been a a while since your last update, we encourage you to get the latest version of your favorite browser. There are many to choose from: Chrome, Firefox, Internet Explorer, and Safari. Please see our supported browser page for more details.




Anthony Wardley
July 23, 2014 at 11.18 am

Can’t wait for the Aus payroll update. The changes sound really useful. So much pain with manual integration at the moment and also leave applications.

July 23, 2014 at 12.02 pm

Would love to see Simplified Salary sacrifice for Super in Xero Payroll

Chad Hewish
July 23, 2014 at 12.12 pm

Can’t wait for the update to Aussie Payroll – no more 10 clicks to finish each pay run! The current system is very confusing for people without an accounting or bookkeeping background. Good news.

Ed Henry
July 23, 2014 at 12.16 pm

Great news for Australian Payroll updates to come!

Cassandra Scott
July 23, 2014 at 12.36 pm

Guys, fantastic to hear about the updates to the Aussie Payroll …… BUT!!!!! the inability to revert older payruns will be extremely problematic. It is not uncommon for bookkeepers to work with organisations that have made a complete hash of their payruns, and we are often required to undo and redo over multiple periods. We still need to be able to do this – its not a perfect world!

Kushal Goonewardena
July 23, 2014 at 12.41 pm

These are all good updates. I would love to see an employee set up wizard when adding a new employee in xero.

Oliver Furniss
July 23, 2014 at 12.44 pm

@Gerry we haven’t looked at changing salary sacrifice for super but keen to hear what you’d like to see improved?

Ben Wood
July 23, 2014 at 12.54 pm

I agree with Cassandra. While we do our best to manage clients with payroll there are times we need to go back and fix months worth of pay runs. We would need to be able to do this somehow. The backlash will be significant if this functionality is removed.

July 23, 2014 at 1.06 pm

Is payroll definitely coming to the UK in due course, and is there any indication you can give of how far out it is? Thanks.

Cindy Fitzgerald
July 23, 2014 at 1.11 pm

I would like to see the process of terminating employees updated and made easier, at the moment it is a nightmare and very time consuming.

July 23, 2014 at 1.18 pm

Great news for Australian Payroll updates to come! However, any updates for AutoSuper? Xero still couldn’t generate a draft bill as the same way as Payrun after processed Super! Have to manually input all employees Super details and accounts when reconciling payment.

Mick McIntyre
July 23, 2014 at 1.24 pm

That’s fantastic Xero! Are you also looking at open Timesheets to be able to be viewed by Payroll administrators? This would also be handy.

Charles Klvana
July 23, 2014 at 1.30 pm

I’m not sure exactly what “reverted” means, because it’s not a complete sentence. I’m assuming Oli that you mean “reverted to draft”?

Coming from the Xero Bookkeeping partner of the year and as a few people have already said, if you mean that literally as it reads, that would be a problem. Doing adjustments/reversals in a following payroll is a pain, it’s simply easier to adjust the incorrect payroll in the first place.

BUT I’m sure you’ve already thought of that, and we should probably wait to see/hear more on exactly what you mean by “the last one only being reverted to draft” before we worry too much? 🙂

Oliver Furniss
July 23, 2014 at 1.37 pm

@Nigel, yes it is. Work is underway but at this point we have no time we can communicate. It wont be released in 2014. As soon as we have more and something to show the blog will be the first place to find out more.

Oliver Furniss
July 23, 2014 at 1.38 pm

@Cindy, do you mean calculation of ETPs? We have no plans in the short run to bring the calculation into payroll. Let me know what ideas you have to make this easier.

Oliver Furniss
July 23, 2014 at 1.39 pm

@Mick, oh yes thats on the list. We want Payroll Admins to be able to view any timesheet, including draft created by the employee.

Fred Gordon
July 23, 2014 at 2.14 pm

Excited for the payroll update, would really love a way to import timesheets. For me this would make Xero just about complete. Great work guys

July 23, 2014 at 2.21 pm

Good news, waiting for Australian Payroll update

July 23, 2014 at 2.24 pm

Will we have access to the journal entry to adjust values according to tracking categories? I have staff that work in multiple locations and while the draft bill method is an extra step in the process, it’s very useful for me to be able to adjust costs per location. Payroll costs tracking is very lacking in Xero – my biggest frustration since moving across from Reckon Accounts.

July 23, 2014 at 2.54 pm

I also agree with previous comments regarding reversion of previous pay runs. This is an important feature and I for one would be willing to wait longer for direct integration with the GL for this feature to be implemented. I think you can see from the comments that this isn’t something that should be left off the feature list.

July 23, 2014 at 3.30 pm

Hi Oliver, with regards to your enquiry to @Geoff above about potential improvements to salary sacrifice. As per the ATO: “the minimum amount of super guarantee you are required to pay in relation to your employee is based on their OTE. As entering into a salary sacrifice arrangement reduces your employee’s OTE, it will reduce the amount of super guarantee that you are required to pay.’ Therefore Xero should be able to automatically calculate the accurate contribution amount based on their gross earnings less the super salary sacrifice (which by the way MYOB is able to do). At the moment we have been advised to set these staff members to have a 0% SGC contribution and then manually calculate and input their contribution each week.
I have other suggestions with regards to the payroll system if you would like to email me.
Otherwise, integrating the payroll with the General Ledger is a great addition to the current system. I am interested to see how pays can be amended once posted as the current flexibility in reverting to draft is useful.

July 23, 2014 at 3.42 pm

Little bit concerned that we may not be able to adjust pay runs other than the most recent one. This is how Quickbooks used to be. As a bookkeeper I find that from time to time there are legitimate reasons why details of a past pay run may need to be changed. In QB we had to delete every pay run back to the one in question then redo them all back – introducing opportunity to introduce new errors. Please clarify this and tell us all that we will – if needed – be able to change past pay runs (understand if you mean that once you introduce the new facilities you may not be able to change pay runs done the “old” way). Please clarify.

July 23, 2014 at 5.19 pm

A bookkeeper or administrator MUST have the ability to make adjustments to previous payruns!! To have to make changes through journals would be a nightmare. Our company used the draft bill to make costing allocations (like David) as Xero is definitely lacking in this area. Allowances, leave, super and tax are currently not allocated to departments and I have to manually do this EVERY week. Occasionally changes need to be done to previous pays so we need to have the ability to make these changes. I look forward to your improvements but don’t make things harder than they already are please.

Deborah Brooks
July 23, 2014 at 6.13 pm

Yes, definitely agree that we need to be able to go back further than just the most recent payroll run if changes are required.

Sally Hams
July 23, 2014 at 6.48 pm

I agree with access to previous pay runs for the required amendments our job sometimes involves. Creating a draft bill seems to be double handling and not the most efficient way, so glad Xero have streamlined this process.

July 23, 2014 at 7.45 pm

Agree totally with Jenny – we too manually split payroll costings by department on the draft bill as Xero doesn’t as yet have the ability to tie an employee to a cost centre.Automatically updating the GL with these postings will mean more journals for me! Also agree – there are instances when pay runs need to be reverted so am a little worried if only the last pay run has this facility.

Mike Block CPA
July 23, 2014 at 8.22 pm

I was glad to see Federal e-pay for US payroll (payment of payroll taxes). However, what happened to U.S. tax withholding until now? When will we be able to e-file U.S. payroll tax returns (we have no payroll without this)? Will the five user price include e-pay direct deposit and e-filing returns?

July 23, 2014 at 8.37 pm

I hope UK payroll will come soon

July 24, 2014 at 12.24 am

Fantastic update guys – The improvements keep on coming!

July 24, 2014 at 12.44 am

@David if you’re interested in cost tracking by location, you should check out KeyPay ( We have locations built in as well as ALL the other features Xero are planning to release and a whole lot more.

We are fully integrated into Xero and support posting direct to the GL (as well as using the invoice method if you’d prefer) and our journals can even split by locations to give you a true costing.

Check out this video if you’re interested in finding out how job costing works in KeyPay

Oliver Furniss
July 24, 2014 at 4.28 am

@Alan, Dean, Jenny and Rob, please see the community post where we’ve asked a question around handing this through an unscheduled pay run.

@Mike, Not sure what you mean by “what happened to U.S. tax withholding until now”. Payments to date are handled outside of Xero. In terms of e-file we released Federal e-file in June and the next target is supporting CA e-file. As it stands the Standard pricing plan does not include e-file/e-pay or direct deposit.

@Ollie, keep watching the blog for updates as we progress on UK payroll.

@ Cathy, thanks for the feedback.

Trish Hay
July 24, 2014 at 12.30 pm

Please do not take away the process to “revert to draft” – this is a great quick work around for errors that need amending in previous payruns – what you seem to be suggesting is an old Quickbooks task, please don’t take us back there!!

July 24, 2014 at 12.48 pm

I’m very concerned about the possible restriction on going back to alter prior pay runs (other than the most recent). I certainly don’t want to implement ‘band-aid’ fixes in the form of a journal or an unscheduled pay run where the quality of data entered historically is terrible. I know there have been a lot of requests for pay runs to be automatically posted to the GL, however I can’t stress enough how the flexibility that Xero currently offers in terms of payroll is greatly valued as well.

Colleen Andretzke
July 24, 2014 at 3.22 pm

Most of the changes to the Payroll sound great. I agree though as have often had to undo and redo multiple pay runs. Removing the ability to do this without some other way of providing corrections could be a BIG problem.

July 25, 2014 at 1.16 am

GL Integration sounds good, but I don’t mind the current system as it allows flexibility to make amendments.
Are there plans to improve the expenses system to automate reimbursement of employee expenses with payroll. At present it’s a multi-stage manual process.

July 25, 2014 at 1.21 pm

I’d love to see the payroll journals provide a lot more detail. (eg: Employee Name – Pay Item – Tracking Category) At present the draft bill that lumps aggregate totals up for each account code creates a disaster when we are trying to reconcile our budget against our accounts.

This is one of only two issues I have with Xero after moving over from Quickbooks. We love everything else you’re doing!

July 25, 2014 at 4.19 pm

Global edition already has G/L integration, but lacks many of the nice features found in the US edition. Are we likely to see any of these features trickle through any time soon?

July 25, 2014 at 7.39 pm

We currently use the draft bill to allocate costs to cost centres so to speak for entries that are not processed through the timesheet, eg, travel allowances, performance incentives, leave etc. Will we have the ability to still cost these elements at payslip stage.

July 27, 2014 at 11.18 pm

Second #Brett

Will the Global Payroll edition get some love soon? 🙂

July 29, 2014 at 11.36 am

Is there currently an option to set the default earnings rate for employees?
I have adjusted the pay template, however I still have to select the earnings rate every time I create a new timesheet.
On a visual note the drop downs are not very visible, a darker border would make a big differennce

July 29, 2014 at 12.03 pm

What is the current status of payroll roll out to individual states in the U.S.

Oliver Furniss
July 29, 2014 at 12.15 pm

@John there has been no short term change since our update in June for US Payroll.

@Bob you can setup a timesheet template to help streamline the entry of timesheets.$UseTemplate

@Brett and Eldose we are currently focused on payroll for Australia, the US, New Zealand and the UK. We have no plans at present to update the global Pay Run feature with updates.

@Tom it’s on our radar that the expense process should be simply. Nothing coming in the short term but its something that will be improved in time.

@All we are still collecting comments and feedback on the proposal to restrict pay run reverting on the Community.

We totally understand the need to process adjustments to historical pay runs but there is a balance with the need to maintain historical information. There are numerous issues and consequences with the current flexibility that have caused issues for 1000’s of small businesses.

Kati Haworth
July 29, 2014 at 2.50 pm

I am with Cassandra on expressing concern over not being able to amend payroll in arrears. In this business environment, people who are not accountants or bookkeepers are entering data and whilst they get most of the standard payroll entries correct, there are circumstances when they do not have insight and it is necessary in order for correct reporting to the ATO to amend these entries – sometimes months after they have been done. Excluding accounting staff from this kind of assistance is counterproductive and will encourage the use of alternative payroll programs or accounting programs. I recommend greater, not less, flexibility. You can restrict such amendments to high level authority only, but at that highest level, any entry should be able to be corrected.

Kerry Black
July 30, 2014 at 10.13 pm

Thoroughly agree with Cassandra and Kati on the subject of amendment to payroll runs, this is an absolute MUST as honestly there would not be one client that gets every payroll correct and normally it is months later the error is found. I understand what you say about historical information, but an error is historical information that there is NO need to keep

Oliver Furniss
July 31, 2014 at 4.26 am

Thank you everyone for your feedback it is important to us and we do listen.

Based on feedback we’ve delayed the changes to reverting previous pay runs due to come out in August. Our plan is still to introduce restrictions in the future at a time to be determined. We understand you need to process adjustments to historical pay runs but there is a balance with the need to maintain historical information.

We understand this will be a change to the current behaviour of being able to revert historical pay runs to draft to amend. There are numerous issues and consequences with the current system that we need to address, whilst still allowing for adjustments to be made. Restrictions on editing historical pay runs should make it easier for the vast majority of business who use payroll but it still allows for adjustments to be made, in different ways based on the situation.

Over the next few months we will work to communicate these changes and work with you on how to deal with certain scenarios where it may look like the only solution is reverting a previous pay run but you can in fact achieve the same outcome in a far easier manner.

We believe that this future change, in line with other improvements to assist you such as increasing the number of past pays periods you can select for an unscheduled pay run is the right way forward.

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