Xero itself doesn't directly process payroll payments, but it can be a helpful tool for managing payroll. Here's a breakdown of what Xero offers for payroll:

  • Payroll calculations and deductions: Xero can handle basic payroll calculations, including taxes and deductions. You can set up pay rates, pay frequencies, and deductions for each employee.
  • Record keeping: Xero stores employee data and past payroll records securely. This makes it easy to access past information and simplifies year-end processes.
  • Integration with payroll apps: Xero integrates with third-party payroll apps. If you need more advanced features like direct payment processing, you can connect Xero to a specialized payroll service.

Overall, Xero acts as an accounting software that simplifies the payroll process, but it doesn't directly handle payments or tax filings.  For a more comprehensive payroll solution, you might consider third-party apps that integrate with Xero.