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Getting ready for New Zealand Payroll in Xero

Posted 7 years ago in Advisors by
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We’re getting ready to bring New Zealand Payroll in Xero to life! Soon we’ll be offering a seamless online payroll and accounting experience for our New Zealand customers.

Changing payroll software is a big decision, so we want to share details on what you should expect. This will make it easier than ever for you to process your payroll, stay compliant, pay your employees and report to the Inland Revenue.

Integrated accounting and payroll

With New Zealand Payroll in Xero, information from payroll seamlessly flows into your accounts – eliminating manual data entry and processing. In short, it’s designed to help make running your business easy.

We’ve built beautiful, smart payroll that’s easy to implement and can be used from anywhere. We’ve designed the experiences for businesses with less than twenty employees. If you work with your accountant or bookkeeper they can be invited in to manage payroll for you. Or you can invite someone in to manage payroll without seeing the rest of the business financials.


New Zealand payroll overview


New Zealand Payroll in Xero features

New Zealand payroll supports Small & Large employers for Inland Revenue reporting & filing obligations. You can also:

  • Save time and increase productivity when payroll and accounting software work as one. You’ll decrease the amount of time spent on data entry. Payroll journals are automatically created on the general ledger when posting the payroll.
  • Relax with the peace of mind that Xero automatically looks after tax calculations for you. Built-in Tax, ACC, Student Loan, Payroll Giving & ESCT calculations. Updates to New Zealand payroll regulations and tax rate changes are handled automatically so you don’t have to worry about staying compliant.
  • Manage KiwiSaver details including employee eligibility, employee & employer contribution rates, opting out and contributions holidays.
  • Electronically report your payroll information with the Inland Revenue. Your reports are created, pre-populated for downloading and upload to the Inland Revenue with ir-File including KiwiSaver, Additional & Voluntary Student Loans and Child Support.
  • Create unlimited and flexible earnings, deductions, including Payroll Giving, and reimbursement types to meet the needs of any business. No limits on the number of pay calendars you can create so you can easily have multiple pay frequencies to suit your business needs.
  • Manage Statutory Deductions for Child Support, Court Fines, MSD Repayments and Inland Revenue Arrears.
  • Download your bank’s payment file for ease of upload into online banking to pay your employees. Email your employees their payslips to give them instant access to their pay details.
  • Easily and accurately accrue and record employee holidays and leave accruals including managing leave entitlements for individual employees. Manage statutory leave types including Holiday Pay (8%) and unpaid parental leave types.
  • Invite employees to access pay history, payslips, view leave requests and request new leave via the employee app without seeing the business or payroll financials. Available online via the web on release along with iOS and Android phones shortly afterwards.
  • Collaborate with your accountant or bookkeeper on payroll. Allow them to manage payroll on your behalf by giving them the Payroll Administrator user role.

This is just the beginning. You’ll see constant enhancements, improvements and features being made available as we get your feedback and strive to make it smarter and more powerful. If you’re using the current ‘Pay Run’ feature you’ll be able to continue using this if you wish. Any new businesses will not have this option available to them from Wednesday 4 March.

And if Payroll in Xero does not meet the needs of your business we recommend selecting one of our payroll partners from the Add-on Marketplace.

Pricing, rollout and key dates

We’ll be making New Zealand Payroll in Xero available on Wednesday 4 March. This includes setting up your business and employees with required payroll details.

This means you’ll be able to use New Zealand Payroll in Xero to process payroll and pay employees from 1 April – in time for the new financial year.

With New Zealand Payroll being released we’re removing our existing Premium plan from 31 March and introducing new Premium plans, based on the number of employees you pay each month. If you’re on the Standard plan you’ll get one employee included free of charge.

The new monthly prices (below) represent one monthly cost, which covers both accounting and payroll.

New Zealand Payroll in Xero pricing plans New Zealand Payroll in Xero pricing plans

If you don’t have any employees and you’re currently on the Premium plan you will continue to pay $65 a month for the next 12 months.

However, If you start to use Payroll from 1 April to pay employees, you’ll be moved to a Premium plan that suits the number of employees you pay.

You’ll see more information over the next few weeks as we get closer to making this available including full education material and webinars to help you get started.

There’s not long to wait.


February 28, 2015 at 11.15 am

I agree with others here. I have 3 employee but you want $75 month from me to use Xero from march?
There is allot Xero doesn’t do for $600 a year. other packages have payroll as standard.
Remember this is NZ not the states or Aus. 5 employee’s is a big part of the small business sector here. I don’t pay anything like the extra $25 a month your asking and there are some that are IRD approved that are free. The IRD pay them to do your payroll.
Will this do time sheets, will the team be able to log in and enter there own time sheets that just need approved by manager. Will this have all the reports and efilling for IRD.
Will this be able to set up jobs, department etc to apply the hours too for back costing? Opps that’s one thing Xero DOESN’T DO which is a real pain.
If not its really no different than having to do the statuesque having to enter data twice.
Be very interested in your reply.

This may even force me to stop using Xero. I have 3 employees loaded if your saying I must pay the next level because its more than 1, but I still want to use my current payroll, which appears to be far more comprehensive for less (I’m paid up for 12 months) then it want work???


Oliver Furniss in reply to Mark
March 2, 2015 at 12.20 pm

@Mark – timesheets won’t be available in the first release, this will come later in 2015. As mentioend above if you do not use Payroll in Xero you won’t be charged any extra. You can continue to use your current payroll provider. You will only have to pay the increase monthly fee if you start to use Payroll in Xero.

Stuart Gordon
March 1, 2015 at 11.39 am

As an IPayroll user I don’t have an issue with the pricing and welcome a fully integrated solution. The reason we won’t at this time be changing is the lack of automatic returns submission. We need to increase efficiency through Cloud software not step slightly backwards. I will be watching for further developments, although I would not consider changing systems part way through a tax year.

Oliver Furniss in reply to Stuart Gordon
March 2, 2015 at 12.17 pm

@Stuart, thanks for the feedback. We really want to be able to automate the filing of Inland Revenue returns but this isn’t possible given the current technology available from the Inland Revenue. Xero is not a payroll intermediary, like some of our add-on partners, and so do not do the filing for you. As soon as the technology is provided for true automated electronic filing direct to the Inland Revenue we will support it.

Jen Anderson
March 2, 2015 at 12.11 pm

Our organisation has about 40 staff You are vaguely stating that it “is designed for up to 20 staff but will stretch up further”. Changing payroll systems is a significant undertaking. Specifically why is this not suitable for our larger payroll?

Oliver Furniss in reply to Jen Anderson
March 2, 2015 at 12.15 pm

@Jen, absolutely it works for more than twenty employees. We have thousands of businesses in Australia that have more twenty employees that use Payroll in Xero with no issues. The design and screen layout is optimised for businesses with less than twenty employees but the functionality is the same. Hope that helps.

Martin Etherington
March 2, 2015 at 3.30 pm

Martin from Xero

@Stuart. One of the good things about NZ payroll legislation is the monthly cycle for reporting to Inland Revenue. This means we can change systems at the beginning of any month. There is no requirement to transfer across any year to date tax information. Leave balances are required as well as the last 12 months of Gross Earnings history for all permanent employees. Neither of which are dependent on the tax year.

Martin Etherington
March 2, 2015 at 4.15 pm

Martin from Xero

@Steve @Gill @James and others. The number of employees, for the purposes of determining pricing, is counted based on the number of unique employees ‘paid’ during the month, i.e. a payslip was produced for them. Any employees that haven’t been paid in a given month are not counted. The user will be prompted to upgrade if a the plan limit is about to be exceeded. The plan can be downgraded when the employee numbers fall.

Martin Etherington
March 2, 2015 at 4.22 pm

Martin from Xero

@Graeme Default tracking categories are at the employee level. These can be overridden when entering timesheets. But as @Oliver said above “timesheets won’t be available in the first release, this will come later in 2015”.

Jill Fryer
March 3, 2015 at 4.08 pm

Awesome, looking forward to the training on Thursday. As for the pricing this compares extremely well when comparing with Smartpayroll and IMS. Go for it Xero.

Joel Ram
March 3, 2015 at 5.43 pm

Is payroll available to Cashbook Clients??

March 4, 2015 at 11.38 am

Will the Xero payroll process PAYE and send all information, i.e. IR348 to the IRD like SMARTPayroll does?

Martin Etherington
March 4, 2015 at 10.34 pm

Martin from Xero

@Joel Payroll is only available on Standard and Premium plans. It is not available on partner plans like Cashbook at this stage.

Martin Etherington
March 4, 2015 at 11.00 pm

Martin from Xero

@Julie, Xero doesn’t directly provide a PAYE Intermediary service, but our Payroll can can be used by anyone (e.g. Accountants) that may want to provide a PAYE Intermediary service to their clients. Payroll in Xero produces all the required PAYE and other information via files which at present have to be manually downloaded from the Payroll and uploaded to Inland Revenue using ir-File. (Once Inland Revenue provides the means, these files will be able to be direcctly submitted from within Xero). Payment of the taxes due is simply done by manually entering the total amount into your online banking software like any other payments.

Fiona Woon
March 5, 2015 at 4.42 pm

I have a client with 2 employees who I have just upgraded from cashbook to Standard (increase $31) and have been using it since early Feb. I have tried and can’t access it now – surely I don’t have to tell them it will now be another $25 more? I know what their response will be as they are a small not for profit.

Oliver Furniss in reply to Fiona Woon
March 5, 2015 at 4.49 pm

@Fiona, you only have to upgrade to Premium to pay two employees if you intend to use Payroll in Xero. If you don’t intend to use Payroll in Xero then you can stay on the Standard plan with no increase in cost to the business.

Fiona Woon
March 5, 2015 at 5.03 pm

I am already using the old payroll, or at least I was,but I can’t access it anymore – so it appears I will have to upgrade in order to continue?

Oliver Furniss
March 5, 2015 at 5.05 pm

@Fiona, if you have used Pay Run before you should be able to access it. Can you check under Accounts>Pay Run? If its not there can you email support@xero.com

March 6, 2015 at 6.12 pm

I have had a play with this today and have used the generate opening balances feature per the notes. I have YTD earnings but no leave balances. Why is that?

Roger Nicholls
March 16, 2015 at 9.48 pm

I see you are saying the start date to be the 1st March 2015. But surely the long term benifits for records is to transfer the real actual start date?
What implications could there possibly be in not using the real start date.
We have 45 staff. so seems critical to me1

March 25, 2015 at 2.01 pm

re – no of employees. It does not seem right, that the Ozzies are offered something we in our own country are not, and for less cost. I’m not looking for something for nothing, I am looking for a level playing field – a fair go.

March 30, 2015 at 1.45 pm

Hi Guys, is there a a detailed guide for setting up. We would be moving from one payroll system into yours?

April 28, 2015 at 12.28 pm

Where is the employee invite button? The advertising claims I can invite employees to view payslips etc, but there is no Invite button (or options) in the manage employees screen (like there is in the AU version).

Also, the IR File download only has the .EDF, the other two are missing.

In all other respects, this is a great product and I am very happy to be using it.

Oliver Furniss in reply to Ross
April 28, 2015 at 4.33 pm

Follow these steps to invite an employee to access their own payroll details. The invite will go to the email address you entered for them on the employee’s Details tab.

1 – On the Payroll menu, click Employees.
2 – Click the check box next to the employee’s name. You can only select employees that have an email addresses added.

3 – Click Invite to My Payroll.

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