Cloud accounting provider Xero reports that it processed more than $1 billion of Australian payroll for the first time in June 2014.

The company didn't say how many businesses use Xero payroll, only that more than 200,000 employees were involved.

It may come as a surprise to learn that around 3% of Australia's working population - over 350,000 employees - were paid through Xero during the 2013-14 financial year.

Xero product manager Oliver Furniss said the company is planning to make further improvements to the payroll function: "What you’ll see is true seamless accounting and payroll. Payroll information will automatically update the general ledger. We're also working away to improve your overall payroll experience with updates including employee search, changes to the leave scheduling process and much, much more."

Company officials noted the various advantages that Xero's payroll capabilities provide to small business owners and managers, including simple pay runs, 'anytime, anywhere' access, and automatic handling of superannuation and tax changes.

Payment summaries (previously known as group certificates) can be generated in a matter of minutes, and tax file number declarations are also dramatically simplified.