How to add employees in payroll (US)
Xero has an intuitive layout to set up new employees and update existing ones. Here’s how:
View employees by going to Payroll and Employees. You can invite staff into the employee portal, so they have access to their payroll information.
To add a new employee, select Add Employee.
First you’ll see the Details tab with their basic information, go ahead and enter these. Fill in their Contact Information. Then Emergency Contact details. Permission to approve time off and timesheets can also be set here.
When making changes on any of the tabs, ensure you save your work before moving on.
On the Employment tab, add or change their work location. Enter the employee's social security number. Start Date. Then the Payroll Schedule. If there’s no Payroll Schedules listed, these can be added in Payroll Settings.
If a salary or wage hasn’t been setup yet or to add a new one, select ‘Set New Salary & Wages’. Enter the Regular Earnings Type, and whether they’re paid hourly or on a salary. If you choose Salary, make sure you enter their annual Salary amount. The Effective Date can be different to the employee’s Start Date, this is the date their salary begins. Once you’re done, click Add.
On the Taxes tab, Federal and State tax details can be entered or changed. Put in the employee’s filing status. Total allowances, and any additional amount that gets kept aside. Tick any tax exemptions, then follow the same process for State taxes.
Time Off shows current Time Off Balances and Requests. If necessary, you can assign time off types for employees here. Choose the type. If a type isn’t showing, you’ll need to set it up in Payroll Settings first. Then select when it should accrue. Accrual amount. Maximum to accrue. And the balance, if there is one. Requested time off applications can also be approved, and new one’s added.
How your employees are paid can be changed on the Payment Method tab. If you choose Direct Deposit, enter their bank account details.
Split their pay between multiple bank accounts if required, and save.
The Paystubs tab simply shows the paystub history for the employee, and these can be downloaded as a PDF.
Default pay items that populate a payrun for the employee can be modified on the Pay Template tab. This includes earnings, deductions, reimbursements, and benefits.
As an example, if the employee has a regular deduction for Health Insurance, click ‘Add New Deduction’. Select Health Insurance. Choose whether the deduction is a fixed amount or percentage. Enter the Amount. Then Save.
On the Opening Balances tab, enter or change the opening balances for pay items and taxes. This can be done until your first Payrun has been processed.
Once you’ve set up your employee, you’re ready to include them on your next payrun.
To learn more about adding employees check out our help article: