Running your regular payroll and handling your employee superannuation can be done simultaneously in just a few clicks. By using Xero's integrated payroll system, your wages, taxes, and super tracking are calculated automatically as you work through your pay run. Once your payroll is finalised and approved, you can immediately initiate the super payments through Xero’s built-in clearing house by simply clicking the "pay super" button. Here is a quick, step-by-step guide to walking you through processing your pay run and clearing your super obligations all in one go.
Step by Step Guide
Step 1: Pre-Flight Check
Before you touch anything else, make sure your employee is fully set up in Xero. Check that their personal details, TFN, super fund info, and bank details are locked in. Also, make sure their pay rates are saved and ready to go.
Step 2: Approve the Timesheets
If your team uses the Xero Me app to log their hours, your first task is to approve them.
From your Xero dashboard, go to the top menu, select Payroll, and click Timesheets.
You’ll see a list of timesheets currently sitting in Draft status.
Click into each one to review the hours for accuracy.
If everything looks good click Approve.
💡 You’ll notice that the timesheet is now showing as Approved under its status.
Step 3: Create the Pay Run
Now, let’s get into the pay run.
Go back to the top menu, select Payroll, and click Pay Employees.
Click Add Pay Run, select your correct pay period, and hit Next.
You are now inside the draft pay run.
At the very top, you’ll see the grand totals for everyone included in this cycle: Earnings (Gross), Taxes (PAYG Withholding), Super, and Net Pay.
For individual employee breakdowns, just look right next to their names.
Step 4: Pay Day Super & Date Checks
Before moving forward, check your Payment Date. We recommend setting this date a day or two after the Week Ending date. Just be sure it aligns with the employee contracted pay date (or the business day before if it falls on a bank holiday).
Reminder: Make sure the payment date is the exact day the funds will clear into your employees' bank accounts. Also, under Payday Super rules, your superannuation must be processed on this exact same day.
Step 5: Tweaking Individual Pay slips
Need to make changes or add extras? Just click on the employee's name.
What you see here is what your employee will see on their final payslip. In this view, you can:
Add an Earnings Line (for allowances, bonuses, or extra hours).
Add Deductions.
Add a Reimbursement Line (to pay them back for any out-of-pocket business expenses).
Quick check: Make sure a Superannuation amount is showing up here. Once it all looks correct, click Save (or Save & Next to jump straight to the next person).
Step 6: Post and File
Once you've reviewed everyone, it’s time to finalise. Go ahead and click Post Pay Run.
As soon as it’s posted, a few extra options will appear:
Email Payslips: Click this to send the payslips straight to your team's inboxes.
Make Payment (Blue Button): This gives you two choices. Select Pay Wages (Download ABA file) to upload to your internet banking and pay your team. The other option is Pay Superannuation (which we'll handle in the next step.).
File: Once you are 100% happy with the entire pay run, click File and then select submit on the following page. This sends the Single Touch Payroll (STP) data straight to the ATO.
This finalises the pay run and no further changes are able to be made.
Step 7: Handle Payday Super
With Payday Super, you need to process the super batch on, or before, the pay run's payment date.
Head back to the top menu, select Payroll, and click Superannuation.
You’ll see a list of super batches. The super from the pay run you just processed will be waiting for you under Unpaid Contributions.
Click into it and verify that the total matches your pay run totals.
Check the box for that pay period and click Submit for Approval.
Xero will show you the bank account that will be debited. From here, you have two choices depending on your timing:
Option A (Paying later): If you are prepping this in advance, you can stop here and head back to your superannuation dashboard.
Option B (Paying today): If today is the actual payment date for your employees, go ahead and click on that batch, make sure you have enough funds in your account, and hit Approve. Enter the OTP (One-Time PIN) sent to your phone, and click Submit.