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 starts at £5/month + £1.30/employee on top of a QuickBooks plan (from £16/month). Xero Payroll costs £1.50/employee/month on top of a Xero plan (from £17/month). For small teams, QuickBooks has a higher base fee but lower per-head cost. For larger teams, Xero’s simpler pricing often works out cheaper.
FREE QUOTE COMPARISON
Compare Payroll Quotes from Trusted Suppliers
✓ Plans from £4/employee per month
100% free • No obligation • Takes under 2 minutes
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 wins on affordability for smaller teams - Costs £6 per month for up to 4 employees versus QuickBooks’ £19 monthly minimum pricing
- QuickBooks charges 67% more for mid-sized teams - £25 monthly for 10 employees compared to Xero’s £15 for the same team size
- 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 - 85% of existing QuickBooks customers find payroll integration seamless versus switching to Xero
- Xero’s scalability beats QuickBooks by 40% - Handles unlimited employees on top tier while QuickBooks caps at 25 employees maximum
Quick Comparison
Both platforms require an accounting subscription plus a payroll add-on. QuickBooks has two payroll tiers (Core and Advanced). Xero includes payroll as a single add-on on eligible plans.
| QuickBooks Payroll | Xero Payroll | |
|---|---|---|
| Payroll base fee | £5/month (Core) or £10/month (Advanced) | No base fee |
| Per-employee cost | £1.30/employee/month | £1.50/employee/month |
| Accounting plan required | From £16/month (Simple Start) | From £17/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 | 200 |
| Promo pricing | Core at £0.50/month for 6 months | 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 | £27.50/month (£16 + £5 + £6.50) | £24.50/month (£17 + £7.50) |
| 10 employees | £34/month (£16 + £5 + £13) | £32/month (£17 + £15) |
| 25 employees | £53.50/month (£16 + £5 + £32.50) | £54.50/month (£17 + £37.50) |
| 50 employees | £86/month (£16 + £5 + £65) | £92/month (£17 + £75) |
For small teams (under 25), Xero is marginally cheaper because it has no payroll base fee. At 25 employees, the costs converge. Above 25, QuickBooks pulls ahead because its £1.30/employee rate is lower than Xero’s £1.50 – the saving compounds with each additional head.
The crossover point is around 25 employees. Below that, Xero’s no-base-fee model wins. Above that, QuickBooks’ lower per-head rate wins. In practice, the difference is £2-6/month at most team sizes – the accounting platform preference matters more than the payroll cost difference.
Under 25 employees, Xero is slightly cheaper (no payroll base fee). Over 25 employees, QuickBooks is slightly cheaper (£1.30 vs £1.50 per head). The difference is marginal – £2-6/month at most sizes. Choose based on which accounting platform you prefer, not 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’ Advanced payroll tier (£10/month base) adds same-day direct deposit and expert payroll review, though these features are more relevant for US customers than UK users.
Xero’s 200-employee limit is worth noting. If your business is approaching that size, QuickBooks has no stated cap. For the vast majority of UK SMEs, 200 employees is well above their needs – but growing businesses should be aware of the ceiling.
QuickBooks vs Xero Payroll: Strengths Compared
Xero wins on simplicity and employee experience. QuickBooks wins on per-head cost for larger teams and aggressive promotional pricing.
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, have 25+ employees (lower per-head cost), or want to take advantage of the promotional pricing to try payroll cheaply. The Core tier at £5/month + £1.30/employee is competitive, and the 6-month promo at £0.50/month is hard to ignore.
Choose Xero Payroll if you’re already a Xero customer, have under 25 employees (no base fee saves money), or value employee experience (the Xero Me app is genuinely better than QuickBooks Workforce). The simpler pricing structure – just £1.50/employee, no 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.
