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Discover new features in Xero Payroll for UK subscribers

Posted 12 months ago in Product by Dhan Mannakkara
Posted by Dhan Mannakkara

Late last year, our Xero payroll team ran a research study to understand key administrative challenges faced by UK small businesses or their accountants when paying and managing employees.

This week we’ll start a phased rollout of improvements to our UK Payroll product. These improvements make it easier to set up employees, manage leave and keep on top of tax codes. Xero subscribers will see new features this week, and over the coming months, employee tax code notices from HMRC will be automatically updated in Xero.

Set up employees in less time

Our new employee pages reduce time and errors when setting up an employee. We’ve streamlined the employee Details, Taxes and Opening Balances tabs, so they’re now more intuitive to complete.

The new employee Details tab makes it easy to see required fields. You can look up addresses to reduce the amount of manual data entry. On top of that, setting up an employee on MyPayroll and letting them be a leave approver now only takes a click.

The new employee Taxes tab lets you create or edit tax codes with their effective dates, as well as view a list of previous tax codes used for that employee.  And when you add a new employee into Xero, you can now enter their previous employer taxable pay and taxes paid on the Taxes tab. So you don’t have to navigate somewhere else to enter it.  

Xero Payroll's new employee pages reduce time and errors when setting up an employee.

Set up employees in less time

Make managing employee leave easy

We’ve redesigned our time off pages to make it easier to find leave requests and take action at the right time.

Our new list view immediately shows you upcoming requests that need approving and groups employees based on leave date. You’ll see the type of leave and how long employees are off at a glance – plus see a list of past leave requests.

Our handy new search feature lets you search by employee name, leave type, date or status. This’ll make it faster and easier to find the information you need.

We've re-designed our time off pages to make it easier to find leave requests and take action at the right time.

Make managing employee leave easy

Automate even more statutory leave calculations

We’ve added Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP) calculations to our extensive list of automated statutory pay calculations. An employee on maternity or adoption leave can share their remaining weeks of leave or pay with their partner or spouse. 

A payroll administrator can easily set up Shared Parental leave and pay for employees by going to the Payroll time off page and selecting New, then Statutory Leave then Shared Parental.

Xero Payroll now has Shared Parental Leave (SPL) and Statutory Shared Parental Pay (ShPP) calculations.

Automate even more statutory leave calculations

Coming soon: L, M, N tax code uplifts for the new year

Payroll year end is soon upon us and we know from experience it can be stressful when you’re balancing deadlines with your day to day tasks. The good news is that Xero will automatically update L, M and N codes for any eligible employees, which should help you get ready for the new payroll year in less time.

Coming soon: Automatic HMRC tax code updates

Over the coming months, we’re rolling out improvements to the data received from HMRC. Xero will be able to automatically pull new tax codes and their effective dates from HMRC and push them to the Employee Taxes tab. For new employees, taxable pay and taxes paid with a previous employer will also be received. Xero will notify your payroll administrator and all they then need to do is check, modify or approve.

Keep your eye out in Xero Payroll for our new updates. And if you’re a Xero payroll administrator, get fully up to speed with Xero Payroll certification.


February 13, 2018 at 2.11 pm

This is great, thank you. In Feb 2016 you announced that you were going to sync pensions data with Smart Pensions via PensionSync. Do you know when that is going live please?

Also, the BACS file generator is no good for companies that don’t use traditional BACS but can use other forms of batch payment files. It won’t even export incomplete data to be manipulated elsewhere. Please can you add the CSV payments export option that Accounts / Purchases has available. That at least can be adapted in third party software.

Can there please be an end of pay run list of payments to be made – including employees, HMRC, pension providers etc. I have to fish around to find these every month.

February 22, 2018 at 10.54 pm

Agreed – the payments to be made to HMRC in particular seems an obvious omission. So many great things about Xero, but this seems a payroll basic to me….

Maria Benjamin
February 22, 2018 at 8.08 am

Hi Nigel,

Thank you for the feedback! We’re always looking for ways to improve the experience in Xero and are excited about the new features we just launched. I’ll include your suggestion regarding the BACs file as well as your other requests, in our queue for review and prioritization. Regarding Smart Pension, this is still in the planning phase and the exact timing is yet to be determined.

Best regards,

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