How do I reconcile payroll payments in Xero?

To successfully reconcile your payroll payments with Xero you will need to complete the following steps:

1. Select Accounting  >  Chart of Accounts  >  804 Wages Payable – Payroll >  Select Enable payments to this account and then select Save.

2. Go to Dashboard  >  Select the Bank Account  >  Cash Coding.

3. Select all of the Wage Payments  > Type 804 into the top Account line. (This will pre fill all of the remaining wage payments to this 804 – Wages Payable Account.)

4. Click Save & Reconcile Selected.

5. Now we need to create a Bill for the total Processing Fees that were paid, to do this:

Select Business  >  Bills to Pay  > New Bill.

6. Enter the total value of the payroll payment in Qty (excluding any processing fees that have been paid)

Example $10,000 - > Enter unit price as $0.018 (assuming the 2 PayRewards pts/$ option was selected)  >  Select Amounts are Tax Exclusive  >  Select Tax Rate GST on Expenses.  >  Add reference eg. “Fortnightly pay run 17/11/2022.”

Click Approve.

7. Enter payment date as today’s date  >  Paid From “804 – Wages Payable” > Click Add Payment.