Xero Payroll is the built-in payroll module within the Xero accounting platform, designed for Australian SMEs that want payroll and accounting in a single system without a separate integration. As of June 2025, payroll and automated superannuation are included across all Xero business plans in Australia at no additional cost, covering pay processing, STP Phase 2 reporting, super payments, and leave management. Its core strength is the seamless flow between payroll and the Xero general ledger — pay runs post directly to accounts, and payroll data is immediately available for BAS and financial reporting without manual reconciliation.

■ Key Features

• Integrated accounting & payroll: Pay runs post directly to Xero's general ledger — no separate reconciliation between payroll and accounts. PAYG withholding flows automatically into BAS calculations, and payroll expenses appear in financial reports in real time.

• STP Phase 2 & automated super: Automatically calculates and submits PAYG withholding, superannuation, and leave entitlements to the ATO each pay run. SuperStream-compliant automated super payments included.

• Employee self-service (Xero Me): Employees access payslips, request leave, and submit timesheets via the Xero Me mobile app, reducing administrative tasks for HR teams.

• Leave management: Automated leave accruals, leave requests via employee self-service, and leave liability tracking visible within the accounting platform.

• Timesheet integration: Employees submit timesheets via Xero Me; approved hours feed directly into the pay run — suited to businesses tracking billable hours or casual hours for payroll.
  
  

■ Who It's Best Suited For

• Australian SMEs (typically 1–50 employees) already using Xero for accounting that want payroll included in the same platform without a separate integration or subscription

• Finance teams and business owners looking for a single system for BAS, accounting, and payroll — where simplicity and integration outweigh the need for complex award automation

• Salaried or straightforward employment arrangements where standard PAYG and super calculations cover most payroll requirements
  
  

■ Integrates With

Deputy, Tanda, Employment Hero, Humanforce, Dext Prepare, Weel, Budgetly, and 1,000+ apps via the Xero App Store.