Xero Payroll Review: The Ultimate Guide
Xero payroll is a cloud-based accounting software solution for small businesses. It offers features such as Single Touch Payroll (STP), automated bank feeds, and invoicing for time-based services. Users can also customise the chart of accounts and import existing data. Xero also suggests possible matches between transactions on your bank statement and entries in the system.
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What is Xero Payroll?
Xero Payroll is a payroll software solution provided by Xero, a leading cloud-based accounting platform. Xero Payroll is designed to help businesses efficiently manage their payroll processes, automate calculations, and ensure compliance with payroll tax regulations.
Here are key features and functionalities of Xero Payroll:
Payroll processing: Xero Payroll automates the calculation and processing of employee wages, salaries, bonuses, and deductions. It allows you to set up pay schedules, define pay rates, and handle different pay types.
Tax calculations and compliance : The software automatically calculates payroll taxes, including federal, state, and local taxes, based on the latest tax rates and regulations. It ensures accurate withholding of taxes from employee wages and generates tax forms, such as W-2s and 1099s, for year-end reporting.
Direct deposit and pay runs : Xero Payroll supports direct deposit, allowing you to quickly pay employees by electronically depositing their wages into their bank accounts. It provides options to schedule and manage pay runs, including customising payment dates and frequencies.
Employee self-service: Xero Payroll includes a portal to access their pay stubs, view and update their details, submit time off requests, and manage their tax withholding preferences. This empowers employees to access their payroll information conveniently.
Time tracking integration: Xero Payroll integrates with time tracking apps and systems, enabling you to accurately track employee work hours and seamlessly transfer time data for payroll calculations. This integration helps streamline payroll processes and ensures accurate payment based on worked hours.
Leave management: Xero Payroll allows you to manage employee leave and track different types of leave, such as vacation, sick leave, and parental leave. It provides features to set up leave policies, track balances, and process accurate leave payments.
Superannuation (pension) management: Xero Payroll helps businesses manage employee superannuation contributions. It facilitates the calculation and tracking of superannuation amounts, the generation of superannuation reports, and the ability to submit superannuation payments to complying funds.
Reporting and analytics: Xero Payroll provides a range of payroll reports, including payment history, payroll summaries, tax reports, and superannuation reports. These reports offer insights into payroll costs, tax liabilities, and compliance, helping you monitor and analyse payroll-related data.
Compliance and legislative updates: Xero Payroll stays up to date with payroll regulations and tax requirements, ensuring compliance with changing legislation. It incorporates legislative updates into its system, helping businesses meet payroll tax obligations.
Integration with Xero accounting: Xero Payroll seamlessly integrates with Xero accounting software. This integration enables easy syncing of payroll data with your general ledger, providing a holistic view of your financial records and simplifying bookkeeping.
Xero Payroll offers businesses a comprehensive payroll solution, combining automation, compliance features, and integration capabilities with other Xero accounting tools. With its user-friendly interface and cloud-based accessibility, Xero Payroll is suitable for small and medium-sized businesses looking to streamline their payroll processes and ensure accurate payroll management.
Xero Payroll Costs
Xero isn’t the cheapest cloud-based accounting software on the market, but it’s far more affordable than competing solutions like QuickBooks. The software offers a free 30-day trial and a demo company, so you can try it before buying. There’s no annual contract; you can cancel any time with 30 days’ notice.
Xero Payroll Packages
Package
Starter
Standard
Premium
Price
£7 per month
£14 per month
£18 per month
Suitable For
Good for sole traders, new businesses, and the self-employed.
Good for growing small businesses.
Good for established businesses of all sizes.
You can easily create online invoices and track payments using the Xero app. It syncs with your bank accounts and automatically imports and categorises recent transactions. It’s easy to reconcile and secure with bank-grade encryption and two-factor authentication.
Xero’s cloud-based accounting software can help you stay in control of your finances by monitoring cash flow and identifying areas for improvement. Its dashboard displays vital statistics, including who owes you money and bills due. Xero also allows you to set up online bank feeds and automate expense tracking through Hubdoc, an app that scans receipts and bills. It also has a built-in project tracking tool and supports multiple currencies.
History of Xero Payroll
Xero provides easy-to-use accounting software that helps small businesses manage their finances and payroll. Its dashboard offers a snapshot of your company’s cash position, including book and bank balances, outstanding accounts receivable and overdue payables, and a fully customisable watchlist of accounts critical to your business decisions. Moreover, it also includes free bank feeds and allows you to import your transactions for real-time reconciliation.
Its intuitive design makes it accessible for people without an accounting background. It is compatible with a variety of third-party apps that help automate tasks. It also has a range of features that make it easier to connect with your team. Its mobile app is available on both iOS and Android.
Xero offers unlimited users at each subscription level, unlike FreshBooks, which only has limited user capacity in its lowest-tier plan. The software also features time-tracking tools that automatically update your account. Moreover, it enables you to track leave entitlements with controlled employee access.
Additional Features of Xero Payroll
Xero offers additional features not found in other accounting software, including budgeting, project management, and time tracking. Using these tools will help you improve your business’s efficiency and profitability. Its invoicing feature allows you to generate invoices based on time entries and integrates with other tools to automate processes. In addition, Xero provides a range of payment options, such as online bill payments, credit cards, and direct debits.
The Xero payroll service includes tax automation, payslips, superannuation calculations, and employee self-service. It also enables you to send your payroll details directly to HMRC. Xero’s dashboards and reports will give you a complete overview of your financial situation, from cash flow to outstanding invoices and bank balance.
Xero is user-friendly and intuitive. Users and accountants love its large feature selection, reporting and automation capabilities. The company is also continuously improving its software and adding new features. These include a faster search tool, improved import of bank statements from Hubdoc and increased flexibility when importing transactions through a feed.
Xero Payroll Company Information
Xero is an accounting software solution that offers a wide range of features. Some of these include in-software help videos and articles, a comprehensive knowledge base and live chat support. The company also has a community forum that allows users to discuss questions and issues with other customers. In addition, Xero helps you reconcile your books by suggesting possible matches between bank statement lines and transactions entered in the software.
In addition to its robust accounting features, Xero supports the new government workplace pension requirement for small businesses in the UK. Xero’s Auto Enrolment feature makes it easy for employers to set up and manage employee pension contributions.
Despite these positive points, many users have complained about recent changes to the software. The company recently increased prices and no longer includes built-in payroll in its plans. It also has limited features like project management and expense claims to its most expensive plan. In addition, some users have reported problems with mobile apps.
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