QuickBooks and Xero are two of the UK’s most widely used cloud accounting platforms, and both offer payroll as an add-on. If you already use one for bookkeeping, the payroll decision is usually straightforward – stay in your ecosystem. But if you’re choosing between them from scratch, the payroll features, pricing, and employee experience differ enough to matter.
QuickBooks Payroll Core starts at £5/month + £1.50/employee on top of a QuickBooks Online subscription. Xero Payroll costs £1.50/employee/month on top of a Xero plan (from £18/month, Ignite). QuickBooks charges a £5 payroll base fee that Xero does not, and both charge £1.50 per employee, so Xero works out cheaper at every team size we modelled.
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We verified all pricing from quickbooks.intuit.com/uk and xero.com/uk in September 2026. Both regularly run promotional discounts – we compare standard rates throughout.
- Xero is cheaper at every team size - At 5 employees Xero totals £25.50/month versus QuickBooks’ £28.50, because Xero has no payroll base fee
- The gap is £3 a month up to 10 employees - At 10 employees QuickBooks Core costs £36/month against Xero’s £33; beyond 10 you need QuickBooks Premium and the gap widens to £20.50 at 25 employees and £33 at 50
- Compliance does not separate them - Both submit RTI to HMRC and handle auto-enrolment, and QuickBooks Core and Xero charge the same £1.50 per employee
- QuickBooks excels for established accounting users - existing QuickBooks bookkeeping users get the most seamless payroll integration by staying in the QuickBooks ecosystem
- Headcount caps differ - QuickBooks Payroll Core covers up to 10 employees, Premium up to 50 and Elite up to 200, while Xero publishes no employee cap
Quick Comparison
Both platforms require an accounting subscription plus a payroll add-on. QuickBooks Payroll comes in three tiers (Core, Premium and Elite). Xero includes payroll as a single add-on on eligible plans.
| QuickBooks Payroll | Xero Payroll | |
|---|---|---|
| Payroll base fee | £5/month (Core) or £10/month (Premium) | No base fee |
| Per-employee cost | £1.50/employee/month (Core), £2 (Premium) | £1.50/employee/month |
| Accounting plan required | From £16/month (Simple Start) | From £18/month (Ignite) |
| HMRC recognised | Yes | Yes |
| RTI submissions | Yes | Yes |
| Auto-enrolment | Yes | Yes |
| CIS support | Yes (built in) | Yes (contractor filing needs a separate paid CIS add-on) |
| Employee self-service | QuickBooks Workforce | Xero Me app |
| Max employees | 10 (Core), 50 (Premium), 200 (Elite) | No published cap |
| Promo pricing | Promotional discounts run periodically | Varies by plan |
Pricing at Different Team Sizes
The total cost includes both the accounting subscription and the payroll add-on. Neither platform lets you buy payroll without accounting – this is payroll built into your bookkeeping workflow, not standalone software.
| Team size | QuickBooks Total | Xero Total |
|---|---|---|
| 5 employees | £28.50/month (£16 + £5 + £7.50) | £25.50/month (£18 + £7.50) |
| 10 employees | £36/month (£16 + £5 + £15) | £33/month (£18 + £15) |
| 25 employees | £76/month (Premium: £16 + £10 + £50) | £55.50/month (£18 + £37.50) |
| 50 employees | £126/month (Premium: £16 + £10 + £100) | £93/month (£18 + £75) |
Xero is cheaper at every team size we modelled. QuickBooks carries a £5/month payroll base fee for Core that Xero doesn’t, and both now charge £1.50 per employee, so the gap is £3 a month up to 10 employees once Simple Start (£16) is set against Ignite (£18). Beyond 10 employees QuickBooks needs the Premium tier at £10/month + £2 per employee, which widens the gap to £20.50 at 25 employees and £33 at 50.
There is no crossover point: Xero stays cheaper from 5 employees up to 50 and beyond, because it has no payroll base fee and QuickBooks Core stops at 10 employees. For teams of up to 10 the gap is only £3 a month, so the accounting platform you prefer still matters more than the payroll cost difference; above 10 employees the gap grows.
Payroll Features
Both handle standard UK payroll identically: automated RTI submissions, auto-enrolment pension management, P60/P45 generation, payslip distribution, and HMRC compliance. The differences are in employee experience and integration depth.
Xero Me is Xero’s employee self-service app. Staff can view payslips, request leave, update personal details, and see their leave balances – all from their phone. It’s included with Xero Payroll at no extra cost and reduces the admin burden on whoever runs payroll.
QuickBooks Workforce offers similar self-service – employees can view payslips and tax documents online. It’s functional but less polished than Xero Me. QuickBooks’ higher payroll tiers (Premium £10/month + £2 per employee, Elite £15/month + £3) add features such as expert payroll review, though several of these are more relevant for US customers than UK users.
Headcount limits are not a deciding factor here. Xero publishes no employee cap and is built for small-to-mid-sized teams, while QuickBooks Payroll caps each tier: Core at 10 employees, Premium at 50 and Elite at 200. Teams of 10 or fewer can use either platform without a tier change.
QuickBooks vs Xero Payroll: Strengths Compared
Xero wins on price at every team size as well as on simplicity and employee experience. QuickBooks’ edge is ecosystem fit for existing QuickBooks users and built-in CIS handling.
Our Verdict
For most UK small businesses, the payroll choice follows the accounting choice. If you use QuickBooks, use QuickBooks Payroll. If you use Xero, use Xero Payroll. Switching accounting platforms to save £3/month on payroll makes no sense.
Choose QuickBooks Payroll if you’re already a QuickBooks customer, or if you regularly handle CIS subcontractors and want that built in rather than bolted on. The Core tier at £5/month + £1.50/employee keeps it simple, even though Xero undercuts it on headline price at every team size.
Choose Xero Payroll if you’re already a Xero customer, want the lowest total payroll cost at any team size, or value employee experience (the Xero Me app is genuinely better than QuickBooks Workforce). The simpler pricing structure – just £1.50/employee on top of your plan, no payroll base fee – is easier to budget for.
If you’re choosing from scratch and payroll is a priority, Xero’s interface and employee self-service give it a slight edge. But both are excellent – the two are close, and payroll follows the accounting choice.
Want standalone payroll instead? Best payroll software compares 10+ UK platforms. Sage vs Xero Payroll compares the other major matchup, and our payroll outsourcing costs guide covers managed services if you’d rather not DIY.
