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All Tutorials /Xero

How to Connect PayPal to Xero

Updated on:
June 5, 2026
By:
Madhav Bhandari
Use this interactive demo to learn how to link your PayPal account to Xero for seamless payments.

Quick summary

Connecting PayPal to Xero lets businesses automatically reconcile online payments by adding PayPal as a payment service through Xero's Settings menu. Once configured, incoming PayPal payments are deposited directly into your designated Xero payment account, streamlining bookkeeping and reducing manual data entry.


Steps

  1. On Xero's main dashboard, head to the top-left corner and click the Company tab.
  2. Select Settings from the list of options.
  3. Click Payment Services to proceed.
  4. Scroll down to the Available Payment Services tab, then click the Add Other button next to it.
  5. Pick PayPal from the available options.
  6. Fill out the required fields one by one: Account Name, Account Email, and the Xero Payment Account where payments will be deposited.
  7. Click Save to enable the connection between your PayPal and Xero accounts.

📌 Why this matters

Connecting PayPal to Xero eliminates the need for manual payment reconciliation by automatically syncing PayPal transactions directly into your Xero accounting software. This integration ensures that every PayPal payment is recorded against the correct account in real time, reducing errors and saving hours of bookkeeping. For small businesses and accountants managing high volumes of online payments, the Xero PayPal integration is a critical step toward fully automated financial workflows.
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