Xero payroll setup explained (2026): a complete guide to Xero payroll

Payroll isn’t just admin. You’re dealing with wages, tax, and super and small setup decisions here can flow through everything in your accounts. The tricky part is… Xero will still run payroll even if the setup isn’t quite right. So in this video, I’ll show you how to set up Xero payroll properly from the start so you can trust what your numbers are telling you. ——————— 🥁 Complete Payroll Course ——————— Join the waitlist: https://www.bookkeepingtutor.com.au/x... Like 👍 and share if you enjoyed it! 🔥 videos: ⚡️Xero Tour for Beginners (2026): What You’re Looking At and How It All Fits Together    • Xero Tour for Beginners (2026): What You’r...   ⚡️9 most common mistakes    • 9 Xero Mistakes That Start Small but Creat...   ⚡️ Xero Homepage: What Changed and What Deserves Your Attention on the New Dashboard    • Xero Homepage: What Changed and What Deser...   ⚡️ Xero Bank Accounts Explained: Add and connect business bank account    • Xero Bank Accounts Explained: Add and conn...   ⚡️ How to Manually Import Bank Statements into Xero    • How to Manually Import Bank Statements int...   ⚡️Invoicing in Xero: How to Create and Send Your First Invoice    • Invoicing in Xero: How to Create and Send ...   ⚡️Bills vs Spend Money in Xero: the rule that keeps your records clean    • Bills vs Spend Money in Xero: the rule tha...   ⚡️Invoice Reminders in Xero - Get Paid Faster without Chasing Customers:    • Invoice Reminders in Xero - Get Paid Faste...   ⚡️How to choose the right Xero plan?    • Choose the Right Xero Plan and Avoid Wasti...   ⚡️I Asked AI to Record Complex Xero Transactions: Which One Gets It Right?    • I Asked AI to Record Complex Xero Transact...   ——————— ✅ XERO ——————— Get Xero with 90% off for 6 (!) months https://bit.ly/subscribexero ——————— 🚀 BOOKKEEPING 101 ——————— Join my FREE Bookkeeping 101 mini-course to better understand the core bookkeeping principles 🧑‍💻 https://www.learningportal.bookkeepin... ——————— 📚 CHAPTERS ——————— 0:00 Intro 0:55 The setup wizard in Xero 1:56 Pay calendar 3:34 Payroll accounts 4:41 Payroll expense vs payroll liabilities 7:01 Organisation details 7:37 Adding the first employee 14:38 Single Touch Payroll (STP) 16:19 Recap ——————— Let's get social: Facebook:   / bookkeepingtutor   Instagram:   / bookkeepingtutor   Pinterest:   / bookkeepingtutor   Website: https://www.bookkeepingtutor.com.au Email: hello (at) bookkeepingtutor (dot) com (dot) au #xero #xeropayroll #payrollsetup #bookkeepingtutor #xerotips #smallbusinessbookkeeping #xerohowto #LearnXero #XeroTutorial #xeroforbeginners #xeroexplained Setting up Xero payroll is not just about switching a feature on. The way you set it up determines how your wages, tax, superannuation, and reports behave going forward. In this video, I walk you through the full Xero payroll setup step by step, in the right order, so your numbers stay accurate and aligned from the very beginning. We cover pay calendars, payroll accounts (including the expense vs liability distinction that trips most people up), organisation details, adding your first employee with all the critical settings, and Single Touch Payroll so you understand not just what to enter, but why it matters. This isn't just a button-clicking walkthrough. I want you to understand why each setting matters, because in payroll, a clean setup means clean reporting, and a messy setup means messy corrections down the track. If you are setting up payroll in Xero for the first time, or want to make sure your current setup is correct, this walkthrough will help you build a solid foundation. When payroll is structured properly, everything that follows becomes easier, cleaner, and far more reliable. 🔔 Subscribe for more tutorials    / @thebookkeepingtutor   =========== DISCLAIMER: Please note that every effort has been made to ensure that the information provided in this video is accurate. You should note, however, that the information is intended as a guide only, providing an overview of the general information available. This video is not sponsored or endorsed by Xero.Some of the links above include affiliate links. If you click through and make a purchase from our partners, we may receive a commission at NO extra cost to you. It helps us provide Xero tutorials to you.