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Community > Feature Requests >

UK Payroll - Pay Expense Claims via payroll?

Started by Jane Stanley in Feature Requests | Idea

I want to be able to pay out expense claims through the payroll (which I thought was quite normal!) However, I'm told that the payroll and expense claim sections of Xero are not integrated. I want to be able to record expenses using the expense claim system (employee enters expense claims with supporting receipts) and then I authorise. I then want to be able to include the payment on their wage slip. How can I do this without doubling up payments? Whichever way I seem to do this, it results in incorrect figures on profit and loss or balance sheet. Xero have told me to use liability codes for the payments, but this still doesn't allow me to reconcile the payment made from the bank.

Using their "work around" I get a credit for the payment, then debits for :-
1. Payroll reimbursement
2. Expense claim
3. Bank payment

Merged: UK Payroll - Syncing Expense Claims


I see the payroll section has the ability to enter the details of the expenses reimbursed, and a section to enter the expenses that are being reimbursed but it doesn't seem the two are connected as one might expect?

Am I missing something?


Adam Weekes

Hi Adam,

Thanks for your comment. Expenses don't flow into Payroll yet, so reimbursements in Payroll are just a lightweight way to add those in to show on employee's payslips.



Megan Caywood (Community Manager)

Oh, so you've built a system that sits in Xero but isn't really a part of Xero? What an odd thing to do!

Adam Weekes

Hi Megan,

Can you tell me

a) When expenses are going to be integrated into Payroll? This seems a fundamental requirement
b) How we are supposed to process expense claims paid through payroll currently? I've been given a "work around" by Alisha, but this doesn't work as she doesn't take into consideration that the payment comes out of the bank account. I want to be able to record the expense in the expense claim section (including attachments for audit purposes), then have the expense claim included on the payslip so that the employee knows that they have been paid for their expenses in addition to their salary, and then be able to reconcile the amount paid to salaries and expenses so that the expenses show as no longer outstanding.

I'm honestly really shocked to find out that this functionality doesn't currently exist.


Jane Stanley

Merged: Expense Claims not linked through to payroll

This really does surprise me that payroll doesn't link to expense claims. I've been trying various "work arounds" suggested by Xero support, but none of them work.

I need to be able to enter expense claims through the expense claim system, and then have this add on to the payslip of the relevant person. The employee will receive a single payment which includes net wages and expense reimbursements. The bank reconciliation will then need to reconcile to the original expense claim (and mark it as paid). The profit and loss report and the balance sheet will need to reflect this correctly (the expense should NOT be included in the wages payable amount as suggested by Xero support).

Surely this is a basic requirement? I've never heard of expenses being paid separately from wages before. Please let me know when this is scheduled to be completed.

Jane Stanley

Merged: Payroll doesn't integrate with Expense Claims

When is Payroll going to be integrated with the expense claim system?

This seems a fundamental requirement that is missing. What are the steps I would currently need to take in order to be able to pay out expense claims through the payroll? I need to be able to reconcile the bank statement lines, and also mark the expense claims as paid.

This is really an essential requirement for our business.

Jane Stanley

Hi Jane, I made your original post a Feature Request so you and others can add your vote and comments there. I'll merge this post into it too :)

Matt Oldfield (Community Manager)


I was looking to use the expense section of Xero and then add this expense to payroll...from reading the replies above it appears you can't. I agree that it really is a basic requirement. I vote we need it!


Stef Thomson

I add my vote for a one-button solution to paying expense claims through payroll - in any country. It does seem fundamental, and the way it is set up now the process creates unnecessary extra work - not just in the program, but functionally for setting up an independent pay schedule and distributing checks.

W Dean Kaiser

Merged: Ability for users to key expenses within MyPayroll


Wouldn't it be a fantastic idea to allow users to key in their expense claims from their My Payroll area?

This would mean that the expense claim feature becomes more utilised, because up until now, I've not used this feature because the access permissions allow users to view other information that they shouldn't have access to.

It makes perfect sense for my organization because we generally reimburse expenses once a month, via payroll.

Please vote!

Ali Saigar

Merged: Pay Approved Expense Claims Through Payroll

Once an Expense claim is approved on the system and sitting in awaiting payment. At the bottom of the expense claim you have Amount paid, Date Paid, and Paid from.

In the Paid from section there should be the option to select through payroll and for that expense claim to automatically be added to the employees next payslip

Ryan Bignold

Merged: UK Payroll - Expense Claims through Payroll

My boss has input an expense claim in Xero, which is currently awaiting approval.
I would like to be able to pay it through the payroll, but the "work around" isn't good enough for me. It seems to involve setting up a suspense account on the balance sheet for the expense claim to be allocated to, and then also allocating a reimbursement through the payroll. Surely this negates the expense on the balance sheet, and means it doesn't show in the P&L even though it is a business expense. To me, this is bad accounting.
Why can't we choose, like in the purchases, to assign it to an employee? Or, why can't the employees enter the expense themselves through My Payroll?

Clea Whitley

It does not make any sense that expenses which are submitted by employees can not be paid directly in payroll... It makes the system inefficient and error prone.

Antoine Carlier

Merged: Better expenses reinbursement process

When paying staff members' expenses, it would be great to be able to add them quickly to the monthly payroll by simply ticking a box "pay in this period?"

We already know the employees name, the value, what the expense was for (ie food, mileage etc) and which code that it has been assigned to. When making a monthly payment, would it be possible to see a list of approved expense claims for that particular employee with a check box asking whether or not to repay the expense in this payment?

James Nunn

Merged: Employee re-imbursement in timesheet

Our techs sometimes have to buy materials in the field.

It would be nice if they could add these expenses to Timesheet so we could easily re-imburse them on their checks.

Dan Terrigno
American Safe

Dan Terrigno

Merged: UK Payroll - Pay employee expenses in Payroll

When is Xero going to properly integrate expenses in Payroll? We need to enter expenses and have them updated onto the payroll. We need the P11D reporting to be handled, and we need to be able to do payrolling benefits in kind/expenses as per the HMRC requirements.

Jane Stanley

Yes I agree....is Xero going to support the payrolling of benefits which becomes mandatory from April 2018?

Hannah Durrant

This is the reply I received from Xero :

"Hi Jane

I can confirm that we are in line with HMRC's legislation in regards to the services we currently provide.
As employers that are required to apply payrolling benefits in kind falls outside of our target audience of small businesses, this feature is not supported in Xero.
In this instance, you would need to find alternative reporting.

Kind regards

It seems that they aren't interested !!! I find this astonishing.

Jane Stanley

To be honest, the more I use Xero and find out the things that it can't do, I'm considering alternative software never mind reporting.

Jane Stanley

i'm also shocked that xero can't do this, but also getting used to the amount of times i am shocked that xero can't do basic things bookkeeping software should.

Tank Green

Merged: expense reimbursement

We would like to be able to add expense reimbursements to the monthly payroll.

Tim Williamson

Merged: UK Payroll - Payrolling Expenses

To fall in line with HMRC it would be good for us to be able to payroll staff expense e.g. Cars

Caroline Forbes

So is this on the development list yet? There are no dates here so I don't know when it was requested.

Teressa Taylor

The date a thread started doesn't have much influence over if or when it could be developed, Teressa. Status of a request can be used to get a sense of the current state of an idea. Being in 'Idea' status there currently isn't any active development for building a direct method of paying expense receipts through payroll.
Do add your vote at the top of this thread if this something interested in - It helps us feed interest back to Product here, and if there's any progress we'll post an update for all those following the convo.
In the meantime, there is a way to pay employee's expense through payrol - Follow the detail in Xero Central. :)

Kelly M (Community Manager)

Yes I'm aware of the manual process. I did add my vote but it doesn't really inspire me to keep paying for the new expense claims function if this isn't on the development map. Thanks for your message anyway.

Teressa Taylor