Navigating the landscape of accounting and payroll software can be challenging, especially when trying to make sense of pricing plans and additional costs. Xero, a popular choice among UK businesses, offers various subscription options and additional features to fit diverse needs.
This article aims to provide a detailed explanation of the costs associated with using Xero for payroll, incorporating the most recent pricing information.
Xero payroll costs compared
| Plan | Standard Monthly Cost | Discounted Cost (First 6 Months) | Included Payroll | Cost After Free Period | Additional Employee Cost |
|---|---|---|---|---|---|
| Starter | £15 | £7.50 | 2 Months Free | £5/month for up to 5 | £1/month |
| Standard | £30 | £15 | 2 Months Free | £5/month for up to 5 | £1/month |
| Premium | £42 | £21 | 2 Months Free | £5/month for up to 5 | £1/month |
| Ultimate | £55 | £27.50 | Up to 10 Included | £1/month per extra | £1/month |
Xero subscription fees
Xero offers a range of subscription plans tailored to meet the needs of different types of businesses. These plans are generally categorised into Starter, Standard, Premium, and Ultimate. Here’s a breakdown:
Starter
- Standard cost: £15 per month
- Discounted cost: Often reduced to £7.50 per month for the first six months
- Payroll: Not included in the basic package. You can add payroll for 2 months free, and then pay £5/month for up to 5 people + £1/month per additional person.
Standard
- Standard cost: £30 per month
- Discounted cost: Often reduced to £15 per month for the first six months
- Payroll: 2 months free payroll included. Then, £5/month for up to 5 people + £1/month per additional person.
Premium
- Standard cost: £42 per month
- Discounted cost: Often reduced to £21 per month for the first six months
- Payroll: 2 months free payroll included. Then, £5/month for up to 5 people + £1/month per additional person.
Ultimate
- Standard cost: £55 per month
- Discounted cost: Often reduced to £27.50 per month for the first six months
- Payroll: Payroll for up to 10 people is included. Thereafter, it’s £1/month per additional person.
Additional Xero costs to consider
Payroll for extra employees
As mentioned, Starter, Standard, and Premium plans offer payroll services for up to 5 people at £5 per month after the first 2 free months.
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If your team exceeds this limit, you’ll pay an extra £1 per person per month. For Ultimate plans, the limit is 10 people, and any additional employees cost £1 per month each.
See our separate guide to cheap payroll.
Add-on features
Xero offers various add-on features like advanced reporting tools and enhanced expense management capabilities. These additional features come at extra costs and are optional, depending on your business requirements.
Training and support
While Xero is designed to be user-friendly, some businesses may require specialised training. These training sessions are usually an additional expense. Basic customer support is included in all subscriptions, but premium support could incur extra costs.
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Setup and migration costs
Switching to Xero from another platform may involve setup or migration costs. Some businesses opt for a managed migration service to ensure a smooth transition, which is usually an extra charge.
FAQ about Xero payroll costs
To offer further insight into the financial aspects of using Xero’s payroll services, here is a selection of frequently asked questions that specifically focus on the cost or costs associated with Xero payroll.
For the Starter, Standard, or Premium plans, Xero payroll is initially available for 2 months for free. After this period, the cost is £5 per month for up to 5 people, plus £1 per month for each additional person.
For the Starter, Standard, and Premium plans, if your payroll needs extend beyond 5 people, the cost is an additional £1 per month for each extra person. For the Ultimate plan, after the included 10 people, the cost is also £1 per month per additional person.
Yes, the Starter, Standard, and Premium plans offer 2 months of free Xero payroll services. Following that, standard costs apply.
The Ultimate plan, priced at £55 per month, includes Xero payroll services for up to 10 people. Any additional person will cost £1 per month.
There are no hidden costs per se, but you should be aware of potential additional charges. These may include costs for add-on features, specialised training, and possibly setup or migration services if you’re transitioning from another platform.
While Xero offers various add-on features, these come at an additional cost. The add-ons are optional and are designed to offer advanced capabilities such as enhanced reporting or expense management.
After the initial 2-month free period in the Starter, Standard, and Premium plans, the ongoing cost for Xero payroll is £5 per month for up to 5 employees and £1 per month for each additional person. For the Ultimate plan, after the included 10 people, the cost is £1 per month per additional person.
Yes, while the software is quite user-friendly, some businesses may opt for specialised training for Xero payroll, which usually comes at an additional cost. Basic customer support, however, is included in your subscription.