1. Employee Setup (Required)
Before payroll works, each employee must have:
Employment details
Income type
Employment basis
Start date (must be before current pay period)
Pay frequency (must match company payroll cycle)
Tax details
TFN entered, or set to “waiting TFN”
If either section is incomplete, payroll and timesheets will error.
2. Payroll Settings in Xero
Inside Xero payroll settings:
Set pay frequency (weekly or fortnightly)
Set next pay period + payment date
Xero will manage future periods automatically
3. Sync Employees to Xero
Before sending timesheets:
Go to Integrations → Preview Sync
Review employees not yet in Xero
Run Sync to create profiles in Xero
If employees are missing in Xero, timesheet export will fail.
4. Creating and Sending Timesheets
Create timesheet in Employee
Configure hours (usually “ordinary hours”)
Finalize + lock
Click Send to Xero
Important:
Employee only sends hours, not pay rates or amounts
Xero handles pay calculation
5. Overtime and Extra Pay
Overtime is not handled in Employee
After import, adjust in Xero:
Change rates
Split hours into overtime
Add reimbursements or extra lines
6. Editing Timesheets After Lock
You can unlock a timesheet:
Requires reason + password
Then edit and resend