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Xero

Accounting suite with built-in payroll in the UK, from £18 per month

Overview

Xero is a cloud accounting platform, operated in the UK by Xero Limited, that includes payroll inside its accounting plans. In the United Kingdom, payroll is built into its accounting plans and priced per person paid: the Grow plan (£39 per month) includes payroll for one person, Comprehensive (£55) for five people and Ultimate (£70) for ten, with additional people costing £1.50 each (£1 on Ultimate); on the Ignite plan (£18) payroll is optional at £1.50 per person[17]. New UK customers were offered 90% off for the first six months with a promotional code[17].

Because payroll sits inside the accounting software, wage journals post automatically and payroll costs appear in management reports without exports. The UK product files Real Time Information reports with HMRC after each pay run, calculates automatic-enrolment pension contributions and sends them to Nest or The People’s Pension, and gives employees payslips and P60s in the Xero Me app[23]. Xero payroll suits firms with simple payrolls and few employees; businesses with complex pay rules, multiple pay frequencies or more than a few dozen staff typically move to a dedicated payroll product. This entry describes the UK product; payroll availability and pricing differ in other Xero markets.

Xero features

  • No per-user licence fees
  • Bank reconciliation and auto-reconcile
  • Online bill payments with free domestic ACH (US)
  • Multi-currency and projects on Established
  • Xero Payroll powered by Gusto (US)
  • Inventory Plus add-on
  • Quotes that convert to invoices
  • Cash-flow forecasting

Xero pricing

Early: US$27/month (20 invoices and quotes). Growing: US$59/month. Established: US$97/month. Promotion at review: 80% off for 3 months. Payroll (Gusto): US$36/month + US$6 per person. Auto-reconcile add-on US$5/month on some plans.

Xero strengths and limitations

Strengths

  • Unlimited users on every plan
  • Large app marketplace and accountant network
  • Integrated US bill pay after Melio acquisition
  • Invoicing integrated with accounting
  • Cash-flow forecasting on every plan
  • Multi-currency on top plan

Limitations

  • Early plan capped at 20 invoices and quotes
  • US payroll through third party
  • Established plan needed for multi-currency
  • 20-invoice limit on Early
  • Multi-currency only on Established
  • Auto-reconcile extra on Early

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