Xero payroll prices and options review – 2023 UK costs guide

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.


 

Video: Answering your common questions about payroll prices and costs

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

PlanStandard Monthly CostDiscounted Cost (First 6 Months)Included PayrollCost After Free PeriodAdditional Employee Cost
Starter£15£7.502 Months Free£5/month for up to 5£1/month
Standard£30£152 Months Free£5/month for up to 5£1/month
Premium£42£212 Months Free£5/month for up to 5£1/month
Ultimate£55£27.50Up to 10 Included£1/month per extra£1/month
Xero payroll costs

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.

What is the initial cost of adding Xero payroll to the Starter, Standard, or Premium plans?

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.

What are the Xero payroll costs for extra employees beyond the included limit?

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.

Is there a discounted cost for Xero payroll in any of the subscription plans?

Yes, the Starter, Standard, and Premium plans offer 2 months of free Xero payroll services. Following that, standard costs apply.

What is the Xero payroll cost in the Ultimate plan?

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.

Are there any hidden costs in using Xero payroll?

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.

Does Xero payroll offer any cost-effective add-on features?

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.

What are the ongoing costs of using Xero payroll?

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.

Does training for Xero payroll come at an additional cost?

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.

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