This post follows from Part 5 - Employee Portal for Timesheet and Leave.

This is the final part of the payroll guide and in this guide we’ll go through:

• Organising your superannuation to be processed in Xero and paid
• Automatic superannuation payments
• Paying what you owe for PAYG withholding - this is the amount you withhold from a person’s pay.
• Payment Summaries at the end of the financial year - see “Payment Summaries” heading.

As you pay employees, they’ll accumulate:

• Superannuation which goes into the superannuation liability account (that calculates the total balance of super you’ll need to pay the super fund) - see “Superannuation” heading,
• PAYG withholding - see the “PAYG Withheld” heading below.

Superannuation

In Australia, employers need to make a superannuation contribution. Superannuation is a contribution to retirement fund so that as people age, their superannuation will fund their retirement.

To add a superannuation fund in Xero:

1. Go to Settings > Payroll Settings > click “Superannuation” tab and “Add Superannuation Fund”
2. Select:
   • “Regulated Superannuation Fund” if the superannuation fund you’re entering is an APRA regulated one (most of them) and fill in the required details.
   • “Self Managed Superannuation Fund” if the superannuation fund you’re entering is self managed (regulated by ATO) and fill in the required details.
3. If you want to edit the superannuation fund, click on the name of the super fund and then update the details. If you want to delete it, then tick the box next to the super fund and click “Delete”. Note that the super funds with the lock symbol next to it cannot be deleted.

You can process your superannuation liability (manually) so that you can see how much needs to be paid to your super fund. Here’s a process:

1. Go to Reports > Superannuation Payments report and select “All” employees
2. Put in the dates as being from the first period to the last superannuation period (usually this is quarterly)
3. Select “Excel” under “Format” and click “Open” which will download an excel file.
4. Using Excel, sort the Fund column and find out how much you should pay a particular superannuation fund.
5. Then pay the super funds what they’re owed.

If you have Xero’s Large plan, you can process super automatically. To do this:

1. Go to Payroll > Superannuation and click “Super-Activation Form” and fill out the forms and return to Xero.
2. Once Superannuation is activated, click “Add Super Payment” button and select lines of pay to be processed and “Submit for Approval”
3. Approve the payments that are pending approval and submit.
4. Make payment to the super funds and reconcile to the superannuation liability accounts.

PAYG Withheld

PAYG withheld payments to the ATO are doe via your activity statement. Here’s how you can calculate with the help of Xero, your PAYG liability and make payment:

1. Go to Reports > Payments Employee Summary report and click “All” from Employee options
2. Put in the dates as being from the first period to the last activity statement period (usually this is quarterly)
3. Select “PDF” under “Format” and click “Open”.
4. The report will show how much you should pay to the ATO for PAYG that has been withheld. Then pay the ATO what they’re owed.

Payment Summaries

At the end of the year, you’ll have to publish a payment summary. A payment summary is where you issue all your employees with a document that outlines how much they’ve earned from you. Here’s how you publish one and send it to your employee.

1. Go to Payroll > Employees and select the check box to the left of the employee you wish to send a payment summary - you can click more than one.
2. Click the “Payment Summaries” button
3. Fill in your organisation details and click “Confirm and Continue”
4. Select employees you wish to send a payment summary to and click “Send to Employee” - Xero will send it via email directly to the email address in their employee details (if you check “Send selected payment summaries to employees via email” and then click “Confirm”
5. Once you’ve done that, you can submit the annual report to the ATO online via Xero. To do that, follow these steps from Xero.

So that’s the end!

Well done. You’ve set up your Xero payroll and now can easily run pay runs for your employees in Xero.