Xero can occasionally have issues saving new Pay Items when some of the existing pay items have invalid setup. In order to resolve this: In Xero navigate to Payroll> Payroll Settings> Pay Items Check all pay items to make sure every pay item has a valid expense account (i.e. the account is active and has a type of Expense). If not then update it to one that is. Be sure to click Show Inactive and also check/update these as required.