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The Payroll Journal dates are currently fixed to be the Pay Date, which is incorrect for any business that has hourly paid employees which must pay after end of month, when all hours are calculated.

Every month all of our P&L figures are wrong because of this. Nobody wants to have to waste time doing loads of manual journals every month, which have the potential for mistakes, when Xero has created a system which is supposed to automate this process.

Others have raised it but Xero never replied, see link at the bottom below.

The solution is:

Create "Payroll Journal Date" as a configurable field in payroll settings, so that organisations can choose this for themselves. It should default to the period end date for that payroll, because as long as it's paid by the 5th of the month, it is fine from a tax perspective.

OR if creating a new field is too much effort, simply change the journal date to always be the period end date, not the payment date.

Probably Payroll was developed to create journals on the payment date because nobody had considered hourly paid industries - most salaried jobs pay within the month. But for many industries this is impossible, so this should be standard functionality and we should not be left with messed up P&L.

https://central.xero.com/s/question/0D53m00007ptAKyCAM/can-i-change-the-date-of-the-payroll-journal