Xero Payroll – Rescue Mission!

Xero Payroll – Rescue Mission!

Xero Payroll – Rescue Missions!

Lately we’ve been on a few rescue missions to get Xero Payroll set up and started after there has been a false start, or it’s been put on the back-burner.

I do love Xero Payroll, it works in a different way to most others out there – but once you get it, it really makes sense.

I must admit though, we have pulled out a few hairs, and uttered a few “terms of endearment” in getting to know this system!

So, here’s just a select few of things we come across that are tripping up the novice (and not so novice…)

  1. The Xero Payroll organisation start date is the date Xero Payroll is going to be used from – not the start date of when the business started, or when the first employee started. It’s a pain if you get this wrong because you can’t change it – you need to invite in Xero Support and they have to manually change it.  You also need to unwind and cancel any open payrolls you might have started.
  2. Xero Payroll does not allow you to change Pay Calendar details. If you want to change your Pay Calendar for any employee, you need to first Create a New Calendar, then move your employee from the old to the new calendar.  You will then find you can delete the old calendar if no-one is allocated to it.
  3. For the annual leave rates to calculate correctly you need to enter in the employees “Opening Balances” – this is up to 12 months employment history. Don’t put in a summary, it doesn’t work.
  4. Xero shows Annual Leave and Holiday Pay in a different way to most other payroll systems. I like it because it reflects the actual real legal situation.  Annual leave is only allocated after 12 months employment.  Prior to that, you will see Holiday Pay accumulating.  Holiday Pay is a $ amount and is 8% of the gross pay.   Once the 12 month mark is reached then the Holiday Pay $ amount will cancel itself out and transfer into Annual Leave in hours.
  5. If paid leave is taken before it has been earned (before 12 months), this will push the Annual Leave total showing into a negative number. You cannot allocate Holiday Pay to be paid out and the Holiday Pay $ amount will continue to accumulate.  If you want to see the overall leave balance simply divide the Holiday Pay $ amount by the hourly pay rate, and this will show you the approximate number of Annual Leave hours it will convert to. e.g. if an employee has -35 hours showing as Annual Leave and has $1746 showing as holiday pay, and they earn $26 per hour, then $1746 divide by $26 = approx. 67 hours.   This employee could still be granted 32 hours paid leave and if they suddenly finished work for any reason the balance would not be over drawn.

It’s worth sorting, and Xero Payroll is a pleasure to use once it’s set up correctly.  We can normally fix it for $250 + GST and happy to do a bit of training too – you won’t need much. If you are interested in this or our Xero software setup or Xero training, please get in touch with us.

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