QuickBooks and Xero are the UK’s two biggest 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 £10/month + £2/employee on top of a QuickBooks Online subscription. Xero Payroll costs £1.50/employee/month on top of a Xero plan (from £16/month, Ignite). QuickBooks has both a higher base fee and a higher per-employee rate (£2 vs £1.50), 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 March 2026. Both regularly run promotional discounts – we compare standard rates throughout.
- Xero is cheaper at every team size - At 5 employees Xero totals £23.50/month versus QuickBooks’ £34, because Xero has no payroll base fee and a lower £1.50 per-head rate
- The gap widens as you grow - At 10 employees QuickBooks costs £44/month against Xero’s £31, and by 50 employees it is £124 versus £91
- Xero offers superior RTI compliance features - Automatic Real Time Information submissions included, while QuickBooks charges extra for advanced compliance tools
- QuickBooks excels for established accounting users - existing QuickBooks bookkeeping users get the most seamless payroll integration by staying in the QuickBooks ecosystem
- Neither has a meaningful headcount ceiling - both state no employee limit and comfortably cover the small-to-mid-sized teams that make up most UK SMEs
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 | £10/month (Core) or £20/month (Premium) | No base fee |
| Per-employee cost | £2/employee/month (Core) | £1.50/employee/month |
| Accounting plan required | From £16/month (Simple Start) | From £16/month (Ignite) |
| HMRC recognised | Yes | Yes |
| RTI submissions | Yes | Yes |
| Auto-enrolment | Yes | Yes |
| CIS support | Yes | Yes |
| Employee self-service | QuickBooks Workforce | Xero Me app |
| Max employees | No stated limit | No stated limit |
| 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 | £34/month (£16 + £10 + £8) | £23.50/month (£16 + £7.50) |
| 10 employees | £44/month (£16 + £10 + £18) | £31/month (£16 + £15) |
| 25 employees | £74/month (£16 + £10 + £48) | £53.50/month (£16 + £37.50) |
| 50 employees | £124/month (£16 + £10 + £98) | £91/month (£16 + £75) |
Xero is cheaper at every team size we modelled. QuickBooks carries both a higher payroll base fee (£10/month for Core vs Xero’s none) and a higher per-employee rate (£2 vs £1.50), so the gap widens rather than closes as headcount grows – from around £10/month at 5 employees to roughly £33/month at 50.
There is no crossover point: Xero stays cheaper from 5 employees up to 50 and beyond, because its per-employee rate undercuts QuickBooks (£1.50 vs £2) on top of having no payroll base fee. That said, the gap is modest at small headcounts (around £10/month at 5 employees), so the accounting platform you prefer still matters more than the payroll cost difference.
Xero is cheaper at every size we modelled, thanks to no payroll base fee and a lower £1.50 per-head rate versus QuickBooks’ £2. The gap is small for tiny teams (around £10/month at 5 employees) and grows with headcount, so for most small businesses the accounting platform you prefer still matters more than the payroll pricing.
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 from £20/month, Elite from £40/month) 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, and QuickBooks Payroll likewise has no stated limit, so both comfortably cover the needs of the vast majority of UK SMEs.
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 £10/month + £2/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 UK accounting software market is a genuine two-horse race, and payroll follows the same pattern.
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.
