BrightPay Xero Integration Guide [2026 Updated]

Integrating your payroll with your accounting software can save you hours of manual journal entry and reduce the risk of costly errors. If you use BrightPay for payroll and Xero for your books, you have access to a powerful integration that sends payroll data directly into your general ledger. This guide provides a complete, updated walkthrough for 2026 on how to connect the two platforms, map your accounts correctly, and troubleshoot common issues.

Why Connect BrightPay and Xero?

Modern accounting relies on efficient, connected systems. Manually exporting payroll reports and keying numbers into your accounting software is not only time-consuming but also creates opportunities for typos and data mismatches. The direct API integration between BrightPay and Xero solves this problem by creating a secure link between both systems.

The core benefits include:

• Reduced Manual Data Entry: Once a pay run is finalized in BrightPay, the corresponding journal entry can be sent to Xero with a single click. This eliminates the need to create a manual journal, saving significant administrative time.
• Improved Accuracy: Automation removes the risk of human error. Transposed numbers or miskeyed amounts become a thing of the past, ensuring your payroll expenses and liabilities are always recorded correctly in your financials.
• Up-to-Date Financials: Sending payroll data to Xero immediately after processing gives you a real-time view of your labor costs. This allows for more accurate financial reporting, cash flow forecasting, and business analysis.
• Streamlined Workflows: For accountants and bookkeepers managing multiple clients, the integration centralizes the payroll and accounting function. It creates a consistent, repeatable process that simplifies period-end closing and compliance reporting across your entire client base.

How the Integration Works: Understanding the Payroll Journal

The connection between BrightPay and Xero works by sending a payroll journal entry directly from the payroll software to the accounting software. It does not transfer individual employee payslips or detailed reports; instead, it sends a summarized journal that correctly categorizes all the financial movements from a pay run.

A typical payroll journal has several components, and understanding how they map to your Chart of Accounts in Xero is the key to a successful setup. Here's what the integration automates for you:

• Gross Wages and Salaries: This is a debit to an expense account in your Profit & Loss (e.g., "Wages & Salaries" or "Cost of Sales").
• Employer's National Insurance Contributions (NIC): This is also a debit to a P&L expense account (e.g., "Employer's NIC").
• Employer's Pension Contributions: Another debit that hits a P&L expense account (e.g., "Employer Pension Costs").
• Net Pay: This is the total amount paid to all employees. It becomes a credit in a liability account on your Balance Sheet (e.g., "Wages Payable" or "Payroll Clearing"). When you pay your employees from the bank, you will clear this liability.
• PAYE & Employee NIC: These amounts are deducted from employee pay and owed to HMRC. The integration posts them as a credit to a liability account (e.g., "PAYE/NIC Payable").
• Employee Pension Contributions: This is posted as another credit to a liability account (e.g., "Pension Payable"), as it is owed to the pension provider.

By mapping these payroll items correctly, BrightPay creates a perfectly balanced journal entry every time, ready for you to post in Xero.

Setting Up the Integration: A Step-by-Step Guide

Before you begin, make sure you have an active BrightPay license and an active Xero account with login credentials that have either Standard + All Reports or Advisor-level permissions. Admin rights are needed to authorize the connection and access the Chart of Accounts.

Step 1: Enable the Xero API in BrightPay

First, you need to tell BrightPay you want to use the Xero integration.

1. Open your employer file in BrightPay.
2. Navigate to the Utilities tab on the main menu bar.
3. Click on 'API Integrations'.
4. You will see a list of accounting software providers. Select Xero and click Enable.

Step 2: Authenticate and Connect to Your Xero Account

Next, you’ll establish the secure connection between the two systems. This is a one-time setup process.

1. After enabling the integration, a new tab titled 'Xero' will appear in your employer file's main toolbar. Click on it.
2. Click the green 'Connect to Xero' button.
3. A browser window will open, redirecting you to the Xero login page. Enter your Xero email and password.
4. Xero will ask you to grant BrightPay permission to access your organization's data. Select the correct Xero organization from the dropdown list (if you have more than one) and click 'Allow access'.
5. Once authorized, the browser will close, and back in BrightPay, the button will now say 'Connected to [Your Organisation Name]'.

Step 3: Map Your Chart of Accounts

This is the most important step in the entire process. You need to tell BrightPay which Xero account each part of your payroll journal should post to. Be deliberate and precise here. If you are unsure which accounts to use, consult with your accountant.

1. In the Xero tab within BrightPay, click on 'Map Accounts'.
2. BrightPay will display a list of all possible payroll data items (Gross Pay, Employer NI, etc.) on the left.
3. On the right, you’ll see dropdown menus. Click on each dropdown to pull a live list of the accounts from your Xero Chart of Accounts.
4. Map each payroll item to the corresponding Xero nominal account. For example:
   • Gross Wages might map to Xero account "477 - Wages & Salaries".
   • Employer's NIC might map to "479 - Employer's NIC".
   • PAYE & NIC (deductions) should map to a liability account, such as "814 - PAYE Payable".
   • Net Pay should be mapped to a liability or clearing account, like "816 - Wages Payable Clearing". You should not map this directly to your main bank account.
5. Take your time and complete the entire list, ensuring every payroll data point used by your company has a destination account in Xero. When finished, click 'Save'.

Step 4: Configure Your Journal Preferences

You can customize how the journal appears in Xero.

• Journal Date: You can choose whether the journal date in Xero should be the Payment Date of the pay run or the Period End Date. Most businesses use the payment date for consistency with bank statements.
• Journal Narrative: Set a default description for the journal entries, for example, "Payroll Journal for [Pay Period]".
• Drill-down Capability: BrightPay can also break down the journal posts by department. If you use departments in BrightPay, check the option to include these details so you can filter your costs by department in Xero. This assumes you have Xero Tracking Categories set up (more on that below).

Step 5: Send a Finalized Payroll Journal to Xero

Once the setup is complete, the process of sending journals is simple.

1. Finalize a pay period as you normally would in the 'Payroll' tab of BrightPay.
2. Return to the 'Xero' tab.
3. The recently finalized pay period will be listed. Click the 'Send to Xero' button next to it.
4. BrightPay will create the journal and send it to your Xero account. It will post as a manual journal in draft form, ready for you to review and approve.
5. Log in to Xero, navigate to Accounting > Manual Journals > Draft, and you should see the journal waiting for posting. Review it, then click Post.

Advanced Tips and Best Practices

To get the most out of the integration, consider these best practices.

• Leverage Xero Tracking Categories: Xero's most powerful reporting feature is its Tracking Categories. You can map BrightPay's departmental analysis to these categories. For example, if you have "Sales," "Marketing," and "Admin" departments set up in BrightPay, you can map them to a "Department" tracking category in Xero. This allows you to run Profit & Loss reports in Xero that show you the exact payroll costs for each team.
• Reconciling Liability Accounts: At the end of each month or quarter, run a P32 report in BrightPay. This shows the total PAYE and NIC owed to HMRC. Cross-reference this total with the balance of your "PAYE Payable" liability account in Xero's Balance Sheet. The numbers should match perfectly. If they don't, it indicates either a mapping error or a manual adjustment has caused a discrepancy.
• Correcting Errors: If you find an error in a pay run after sending the journal to Xero, do not simply resend corrected data. This will often create duplicate entries. The correct method is to first go into Xero, find the incorrect journal entry, and void or reverse it. Then, reopen the pay period in BrightPay, make your corrections, re-finalize it, and send the new, correct journal to Xero.

Common Issues and Troubleshooting

Sometimes you may run into a hiccup. Here’s how to fix the most common problems.

• Authentication Failed: This usually happens if your Xero password has changed or if the API token has expired. The solution is straightforward: in BrightPay's Xero tab, click 'Disconnect from Xero' and then go through the 'Connect to Xero' process again to re-authenticate.
• Journal Fails to Post: If you click 'Send to Xero' and get an error, the most likely cause is an issue with your account mapping. A common reason is that one of the accounts you mapped in BrightPay has since been archived in Xero. Go back to your 'Map Accounts' screen and ensure every payroll item points to an active account in Xero's Chart of Accounts. Another reason can be trying to post into a 'locked period' in Xero; check your financial settings in Xero to ensure the journal date is in an open period.
• Numbers Don't Match: If your P32 report in BrightPay doesn't match the liability account in Xero, it often means someone has manually posted a journal or coded a payment incorrectly in Xero. Trace the source of the discrepancy by running a detailed transaction report on the liability account in Xero. Your payroll data sent from BrightPay should always be treated as the source of truth.

Final Thoughts

Connecting BrightPay and Xero transforms your payroll workflow from a time-consuming manual task into an automated, accurate, and efficient process. Taking the time to set up and map your accounts correctly at the start is a small investment that pays huge dividends in time savings and business insight down the road.

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