Gusto has a native Xero integration, but it syncs individual transactions rather than a single balanced journal entry. Many bookkeepers prefer a proper manual journal for clean reconciliation. Here's how to do it.
Step 1: Download your Gusto payroll summary
In Gusto, go to Reports > Payroll and select the pay period. Download the Payroll Journal or Payroll Summary CSV. This report contains all the figures you need.
Step 2: Map Gusto line items to Xero accounts
- Employee Gross Earnings → Wages Expense (debit)
- Employer Taxes → Payroll Tax Expense (debit)
- Employee Federal Income Tax → Federal WH Payable (credit)
- Employee Social Security & Medicare → FICA Payable (credit)
- Employer Social Security & Medicare → FICA Payable (credit)
- State Income Tax → State WH Payable (credit)
- Net Pay → Net Wages Payable (credit)
Step 3: Post the manual journal in Xero
Go to Accounting > Manual Journals > New Manual Journal. Enter the Gusto pay date, narration "Gusto Payroll – [period]", and all line items. Confirm it balances, then click Post.
PostBooks automates the Gusto → Xero workflow. Upload your Gusto CSV, PostBooks applies your saved Xero account mapping, and exports an import-ready manual journal CSV. Each pay run takes under 60 seconds. Learn more.