Integrating Payroll with Xero

Integrating with Xero Chart of Accounts

1. Go to 'Payroll Settings' > 'Business Management' > 'Integrations'.
2. Go to 'Xero' and click 'Add'.

Once you have selected 'Xero', Click the 'Connect to Xero' button:

You will then be transferred to the Xero login screen to choose an organisation and authorise the payroll system to have access to your Xero data. Once this step is complete, you will be redirected back to payroll to configure extra settings, as follows:

• Select the Xero business you'd like to connect to payroll
• If you want the payroll data exported as an AP invoice or a payroll journal
• If you want the payroll data posted in draft format

Then click on "Save".

Configuring your Chart of Accounts

Once you have configured your integration, the next step is to set up your chart of accounts. You can access the Chart of Accounts screen from your payroll dashboard. Click on Payroll Settings > Chart if Accounts (listed under the Business Settings menu).

Click on "Import Accounts", located on the top right hand side of the screen. A list of all your general ledger accounts from Xero will appear with the toggle defaulted to a 'hide' view. To carry  over any accounts in order to set up your chart of accounts, click on the left of the toggle so that it switched from red to blue: 

Once you've activated all the relevant accounts, scroll to the bottom of the screen and click on "Save Accounts List". You will then be redirected back to the Chart of Accounts screen. You will now be able to map your GL accounts against the payroll components. Further information on how to map the GL accounts can be found here.

N.B. If at any time you create new GL accounts in Xero and want to import into the payroll system, simply follow the instructions above. 

N.B. If you are using a nominal account from your chart of accounts which has a default tax option other than “No GST”, then this is that tax what will be applied to all expenses if that nominal account is mapped to the Employee Expense Account.

Exporting Payroll Data to Xero 

Once you have set up your chart of accounts, you will now be able to export the payroll data directly from within the pay run.

Once you have finalised the pay run, the toolbar will display the "Export to Xero" button. When you click on this your payroll data will be exported directly to Xero.

N.B. If you have posted your payroll data and then unlock the pay run and post again, the following will occur in Xero:

• If you are posting an AP invoice, the original invoice will be overridden by the more recent invoice;
• If you are posting a journal, the original journal will still remain in Xero. You will need to delete that journal manually in Xero.

If you have any questions, send an email to support@nzpayroll.co.nz.