To explain how to link Magnifi’s payroll projection accounts (from labour drivers) to your internal payroll accounts (e.g., in Xero). This ensures projected labour costs can be compared accurately to your actual payroll costs for reporting.
When you are using Labour Drivers to project wages and on-costs such as superannuation, payroll tax, workers compensation, and overtime.
When you want Magnifi’s projected payroll costs to align with your accounting system’s payroll accounts.
When you prefer to manually enter payroll projections and need the flexibility to leave accounts unlinked.
When you build projections using Labour Drivers, Magnifi captures employee details (hourly rate, hours per week, etc.) and calculates the following accounts:
These Magnifi payroll accounts are stored in the background and will not appear in the Profit & Loss Projection until you link them through Chart of Accounts → Payroll Link.
Once linked, the accounts appear in the Profit & Loss with an asterisk (*) to show they are derived from Labour Drivers.
If you double-click on one of these accounts, you’ll see a breakdown of employee balances included in the projection.
Why linking matters: If you don’t link accounts, Magnifi will show its projection accounts (e.g., Wages*) and Xero will also bring in its own accounts (e.g., Direct Wages, Admin Wages). This causes duplicate wage lines in your Profit & Loss report — one from projections and one from actuals.
Payroll Link prevents this by matching the projection accounts to your actual payroll accounts, so the actuals from Xero flow into the same lines as the projections. This gives you one clean line per account with Actual vs Projection values side by side.
You have two wage accounts: Direct Wages A and Direct Wages B.
In Magnifi, you link both of these to the Magnifi account Wages.
The actual values from Direct Wages A and Direct Wages B will now appear in the Profit & Loss under Magnifi’s projected Wages account (the values are combined into one).
This ensures alignment between your accounting system and Magnifi for Actual vs Budget reporting.
💡 Tip: If you want to keep reporting on Direct Wages A and Direct Wages B separately in Actual vs Budget reporting, consider using Divisions:
Set up Division A and Division B under Chart of Accounts.
Link Direct Wages A to Division A and Direct Wages B to Division B.
Assign employees to the correct division.
This approach works well when you want to track department-level reporting (mini P&Ls).
If the above example had Direct Wages A and Overhead Wages B, Magnifi would include a Wages account under both Direct and
Overhead.
If you don’t link an account: the Magnifi payroll account will not appear in the Profit & Loss, and you can enter or adjust values manually.
If you are not using Labour Drivers: you can project payroll manually by entering values against your own accounts (e.g., Wages A & Wages B)
If you don’t see the wage account: you can either add it manually under Chart of Accounts or import it from Xero/CSV.
To apply on-costs (e.g., superannuation, payroll tax):
Quick method: Double-click the account in Projections to create a one-to-one % calculation (e.g., Super = 12.5% of Wages).
Advanced method: Use the Calculations tab to calculate one account as a % of multiple accounts.
Example: Superannuation = 12.5% of Wages A + 12.5% of Wages B.
Labour Drivers are recommended for accurate projections but are optional.
Payroll accounts with an asterisk (*) only appear in the Profit and Loss once they’ve been linked in Payroll Link.
Accounts without an asterisk are your own payroll accounts from the Chart of Accounts.
Linking is flexible — you can link some accounts and leave others manual if you prefer.