Please note payroll is currently only available for Australian conversions. Furthermore, payroll for MYOB Essentials & QBO Australia is not brought in as a bill, it is brought in as a manual journal.

Payslips will not be converted to Xero

During the conversion, Xero does not allow us to bring in the detailed payroll information as you would expect to see in Xero. Instead, we bring through the employees opening balances so that income statements can be created out of Xero easily at the end of the financial year. If you selected a conversion with transactional history you will receive "paid off" bills which represent the actual payments and transactions processed in your file. If you select a balances only conversion you will not be able to view any transactions or "paid off bills" in the system for the history.  You will need to refer to the source accounting file for prior payslips and payment summaries.

Single Touch Payroll (STP)

Please see the options below if required to use STP :
  1. Set up STP in Xero post-conversion
  2. Notify the ATO
  3. Determine the scenario and follow Xero's recommendations for reporting STP
  4. The expectation is that the organisation should be using an STP compliant solution from 1 July 2018 (unless a deferral is granted).  If this is not the case please see the workaround options that are provided here.
  5. To be able to complete STP annual finalisation you will need to have completed at least one pay run in Xero. You can run an unscheduled pay run with Nil balance if you do not have a normal pay run to process.

Payroll - What Converts

Conversions include payroll set up if active in the source accounting file. If you have up to 50 paid employees the cost of setup is fully subsidised by Xero. If there are over 50 paid employees you can receive payroll setup in Xero using our premium ACCELERATE package.

We bring across the following employees:
  1. Employees who are active as at the start of the payroll year OR 
  2. Employees who are inactive but meet the following:
    1. There is a payroll calendar set up for the employee
    2. There is an amount in the PAYG for the employee
  3. All employees set-up but never paid
If there are no pay items associated with an employee they will not convert.
NOTE - if you have terminated an employee in the current payroll year they will still come across as active, you will need to make them inactive. If you select a transactional history conversion service you will receive “paid off” bills which represent the actual payments and transactions processed in your file. This ensures that your general ledger and bank account will match the source file.
Whilst converting terminated employees to Xero there must be a termination date, if there is no termination date we will allocate a dateThe Action Checklist will highlight the employees that need to have the correct termination date added.

In Xero the first step is to reinstate the employee

1. In the payroll menu, select Employees
2. Select past tab.3. Click the employee's name.
4. Select the employment tab.
5. At the bottom of the screen, click reinstate employee.

Once the employee has been reinstated they can then be terminated as per the steps below:

1. In the payroll menu, select the employee.
2. Click the employee's name to obtain their details.
3. Select the Employment tab.
4. At the bottom of the screen, click End Employment.
5. Under the Termination Date, select the employee's last day of employment. This can't be before the employee's start date, or more than 10 years from the current date.
6. Under the Reason for termination, select the relevant option to include in your STP report.
7. Click End employment to confirm.

Employee data that will come across:
  1. Contact details
  2. Employment details
  3. Tax declaration
  4. Leave
  5. Bank account details and
  6. Pay template.
Pay Setup:
Payroll is prepared with:
  1. Pay items - used in the transactional period converted. Any Pay items not used during this period of time will remain unconverted to Xero and can be added post conversion.
  2. Deductions and Reimbursements (will convert if not linked to a bank account)
  3. Superannuation deductions (convert as part of pay template)
  4. Employee details
  5. Pay templates
  6. Pay cycles
  7. Opening balances ( this displays the year to date of what each employee has been paid )
Using this information you will be able to create your payment summaries in Xero for the current financial year.
Any items that contain the word 'allowance' will be set up in Xero as an allowance.
EG. Laundry Allowance = Will convert as an Allowance      Laundry per week = Will convert as Ordinary Time Earnings
Where the ATO classification is unclear we will selected Allowances - Other. In Xero please review and adjust prior to the first pay run if required.
We recommend that payroll settings and employee information be reviewed following a conversion including entitlement.
If you operate on a non-standard financial year please note that reporting data for payroll will only be provided on a standard financial year July - June.

MYOB Online Australia Specific Payroll notes:

There are some data accessibility restrictions in MYOB Online files where the following data is not accessible:
  1. Tax File Numbers
  2. USI / Spin Numbers - Unless we can name match off Xero
  3. Tax Free Threshold is either Yes or No - all other options are not accessible to our extraction
If you are using MYOB AccountRight Live you have the ability to provide a desktop file instead where we are able to extract these details for the conversion.

Quickbooks Online Australia Specific Payroll notes:

There are some variances between Quickbooks these are outlined below
  1. Pay categories require payment classification.
  2. All used pay rates you wish to convert need to have a unit present in the source file. ( refer to the employee pay rates before converting )
  3. Only 1 pay rate template can be used for each employee. ( refer payroll setting > pay conditions > pay rate template )
  4. Only paid Domestic Violence leave entitlement will convert , unpaid Domestic Violence leave will need to be created post conversion.

Reckon Australia Specific Payroll notes:

Reckon Payroll module is an accounting solution for Single Touch Payroll as such we do convert as this is an add-on.       
If the payroll data is contained in your Reckon backup data this will be converted to Xero.


Where possible we bring across superannuation funds for employees.  If a super fund is missing it will be for one of the following reasons:
  1. Because we didn't have enough details or there was more than one SPIN/USI number in the source file. An example is the super fund AMP, which can be one of nine different super funds depending on the spin number. 
  2. Self-Managed Super Funds will not come across as there is no equivalent fund in Xero.
  3. Superannuation details and funds will not come across if the file is MYOB Essentials, MYOB Live, MYE or MYO.
If you are missing a superannuation fund, simply add it in the payroll settings area before you attach it to the employee card. Click this link for the instructions on how to  Add Superfund in Xero.

Unfortunately, as we cannot convert Payruns the Super accrual does not flow into Xero for you to be able to make Auto Super payments. These payments should be made from the source file prior to cancelling the subscription, or through your clearinghouse.

Paying Superannuation in Xero

We suggest paying all superannuation payments up until the date of conversion using your prior system to avoid error and additional work. Depending on your software package in Xero you may have the ability to make use of Xero's Auto Superannuation Payment Process. Either way please find the guide below on how to pay superannuation using Xero.

Processing Superannuation using Auto Super
  1. Paying Superannuation Auto super
  2. Payroll Process Super
Processing Superannuation without Auto Super
  1. Paying Superannuation manually 
Please see the step by step guide here for calculating payroll figures post-conversion.

What We Don't Convert and Other Considerations: 

  1. We do not bring across any employer expenses.
  2. Superannuation details and funds will not come across if the file is MYOB Essentials, MYOB Live, MYE or MYO.
  3. Xero's limitation is set to 200 paid employees over the previous month. The conversion brings over, all employees. Unfortunately, if you have more than 200 employees we will be unable to convert the file.
  4. Future dated leave does not convert you will need to replicate post-conversion.
  5. Timesheets do not convert and will need to be set up in Xero post conversion.
  6. Xero pay items can only be associated with one expense account. If you have used various expense accounts in your source file then you will need to review/add post conversions.
  7. Xero subscription pricing is based on the number of employees paid, not on the total number of employees (active and inactive). If you have business with 100 plus casual employees, but only paid 20 last month, the subscription would be based on the 20, not the 100. You will need to contact your Xero account manager for the correct billing and pricing for greater than 100 employees as per the Xero pricing page.

  1. If you use both the generic payroll settings and the employee payroll templates, the generic settings will be converted.
  2. Annual Leave Accural is calculated on a basis of a  percentage of gross hours, leave calculation method is a fixed amount each period.
  3. Due to security legislation we DO NOT convert
  1. Tax File Numbers - will require post conversion entry
  2. Tax Thresholds - will require post conversion entry
  3. Superannuation USI/SPIN Numbers - matched via name, please ensure name is correct.

IMPORTANT NOTE FOR RECKON & QB FILES:  Any jobs associated with payroll entries will not come across from the Reckon source file to Xero during conversion.

Post Conversion Payroll Recommendations

Please find a list of items to keep an eye on post-conversion:

  1. We recommend that you check your payroll section in Xero to make sure it is up-to-date with current agreements.
  2. Check the Action Checklist post-conversion for the items that did not convert or were missing from the source file.
  3. If you are processing a mid-month conversion you may need to calculate the superannuation and PAYGW manually for the remaining months pays. More information is in our blog.

Payroll Items Linked to the "199 Clearing Account"

Sometimes during conversion, some of the deduction and reimbursement pay items have been linked to the account 199 "clearing account". This account is an account that you should not use in your Xero life, it needs to be unlinked from these pay items before preparing a pay run in Xero.  The reason why that account has been linked during conversion is that in the source file these pay items may have been linked to a bank account or asset account etc. In Xero, you can only link deductions to a liability account and reimbursement items to either a liability account or expense account.

Make sure you update the chart of accounts and create the accounts needed or change any accounts to what they need to be.  Here is a useful Blog  on account types in Xero.

Payrun Error in Xero

Xero subscription plans are based on the number of employees that are paid during a pay run. If the number of employees exceeds your subscription a message from Xero will appear during the pay run process. You will need to upgrade the subscription to complete the pay run.
  1. Xero pricing plan
Only the subscription holder can change the subscription plan.
  1. Find out who the Xero subscriber is
Plans can be upgraded at any time by the subscriber as follows:
  1. Xero Partners upgrading their client's subscription
  2. Business owners upgrading their own subscription

Cannot See Payroll in Xero

Please check here that your user settings allows you access to payroll. 
If you are the subscriber you can always give yourself access. If you are not the subscriber, you need to request access to payroll from the subscriber. 

Xero has a limit of 100 in their subscription plans, but you can have up to 200 with a fee per employee. Please confirm with Xero pricing.

If payroll was not active in the MYOB or Reckon file then it will not have been converted.

Payroll Apps

If you are considering using a payroll app in Xero please consult their App Store:
  1. Australian payroll app store
  2. USA payroll app store

    • Related Articles

    • How to Deal With Single Touch Payroll Post Conversion

      Please see here for how payroll information is converted - this applies to Australian conversions only. Moving from an STP solution Xero's recommendation in relation to converting software mid year for STP purposes is to convert the YTD opening ...
    • Running Payroll Reports Post Conversion

      When setting up payroll in Xero, most employees will have opening balances so that payment summaries can be created out of Xero easily. The downside is that the reporting for the first quarter/ month after conversion does not easily give the correct ...
    • Inventory Items

      All items are created in Xero with their item codes, descriptions and purchase and sales details. What we Convert Item number and item name Base Sales Price Standard cost COGS and Inventory $ COGs and Inventory Accounts Item Description: Note: there ...
    • STP Finalisation Post Conversion

      End of year finalisation is typically required to be completed prior to 14 July each year. For more information please refer to the Australia Taxation Office. To identify the best process for your business, please review the scenarios below and ...
    • Contacts

      Contacts Contact details convert with addresses sorted into Postal and Street in Xero. We check every phone number and make sure the mobile number ends up in the mobile field. We also check each address for variations of PO Box and automatically move ...