While Monchilla offers many of the same features of if you are an existing Xero user Monchilla can be used for payroll and automatically update Xero with the necessary accounting entries.
Note: Most people that are using Xero for accounting and Monchilla for payroll don't bother with this integration. Instead they pay employees and taxes through Monchilla and simply categorize the payroll related withdrawals as "Payroll Expense" within Xero.
To connect Monchilla to Xero:
- Under the Payroll tab, click Integration.
- Click the Connect with Xero button.
- Enter your Xero email and password and then click Login.
- Select your company file and then click Authorize. You will be returned to Monchilla.
- Click the Map Payroll Accounts button.
- Click the Add Mapping button.
- Select the Monchilla Payroll Expense Display Name and the Xero Payroll Tax Expense (672) Account and click Save.
- Repeat step 7 for each of the accounts in the below table.
Paystub Display Name Xero Account Name Xero Account Number Payroll Expense Account Payroll Tax Expense 672 Wage or Salaries Wages and Salaries 668 Federal Income Tax Income Tax Payable 240 State Income Tax Income Tax Payable 240 Medicare Employee Tax Payable 230 Social Security Employee Tax Payable 230 Federal Unemployment Employee Tax Payable 230 State Unemployment Employee Tax Payable 230 Child Support Child Support Liablity 205