Xero Payroll: Simplifying Payroll Compliance and Business Management

Managing payroll can be one of the most time-consuming tasks for small business owners. Mistakes can lead to penalties, unhappy employees, and administrative headaches. Fortunately, Xero Payroll offers an easy-to-use platform that simplifies compliance with ATO Single Touch Payroll (STP) reporting, manages leave balances, integrates with timesheets and expense reimbursements, and provides flexible superannuation clearing house options.

With the ATO closing its Small Business Superannuation Clearing House from 1 July 2026, now is the perfect time for small businesses to streamline their payroll processes using Xero.

1. Stay Compliant with ATO Single Touch Payroll (STP)

STP reporting requires employers to submit payroll information directly to the ATO every pay run, including salaries, wages, PAYG withholding, and superannuation.

Xero Payroll simplifies STP compliance by:

• Automatically generating STP-compliant payroll reports

• Sending pay run data directly to the ATO with one click

• Reducing the risk of errors and late reporting penalties

For small business owners, this means less time worrying about compliance and more time focusing on growing the business.

2. Manage Leave Balances Effortlessly

Tracking employee leave can be tricky, especially as teams grow. Xero Payroll provides real-time leave tracking, including:

• Annual leave, personal/carer’s leave, and long service leave

• Automatic accruals based on hours worked or salary

• Alerts for managers when leave balances are low or when employees request time off

Having a clear view of leave balances reduces scheduling conflicts and ensures accurate payroll calculations.

3. Seamless Timesheet Integration

Many businesses rely on timesheets to track hourly work or project time. Xero Payroll integrates with Xero Timesheets and other approved third-party apps to:

• Automatically import hours worked into the payroll system

• Reduce manual entry errors

• Ensure employees are paid accurately for the time they work

This integration streamlines payroll processing, particularly for businesses with multiple casual or part-time employees.

4. Expense Reimbursement Made Simple

Xero Payroll also allows integration with expense claims, enabling employees to submit reimbursements directly through the platform. Benefits include:

• Direct addition of approved reimbursements into the payroll run

• Faster processing of employee expenses

• Accurate record-keeping for GST and tax purposes

This creates a seamless workflow between business expenses and payroll, saving time for finance teams.

5. Superannuation and Clearing House Options

With the ATO closing its Small Business Superannuation Clearing House on 1 July 2026, Xero Payroll provides built-in superannuation clearing house functionality that allows businesses to:

• Pay multiple super funds in a single transaction

• Automate super contributions for each employee

• Ensure compliance with ATO superannuation obligations

Using Xero’s super clearing house options reduces administrative burden and ensures timely and accurate super payments.

6. Benefits for Small Business Owners

Using Xero Payroll offers small business owners:

• Time savings: Automate calculations, reporting, and payments

• Accuracy: Minimise errors in wages, leave, and superannuation

• Compliance: Ensure STP and super obligations are met

• Transparency: Real-time access to employee payroll information and reports

• Integration: Seamlessly connects payroll with accounting, timesheets, and expenses

Final Thoughts:

Payroll doesn’t have to be a headache. With Xero Payroll, small businesses can streamline operations, remain compliant with STP and superannuation obligations, and provide employees with accurate, timely pay and leave tracking.

As the ATO closes its Small Business Super Clearing House in July 2026, now is the time to consider Xero Payroll as your trusted, integrated solution.

Take control of your payroll processes today, save time, reduce errors, and ensure compliance—all in one platform.

Ready to simplify payroll for your business? Contact us today to see how Xero Payroll can save you time, reduce errors, and keep your business compliant.