Xero Payroll Review: 2026 Features, Prices & Ratings

Xero Payroll is a per-employee add-on to any Xero accounting plan, costing £1.50/employee/month on most plans or £1.00/employee/month on Ultimate. If you already use Xero for accounting, adding payroll is the cheapest and most integrated option – your payroll costs flow directly into your accounts with no manual data entry.

Xero restructured its payroll pricing in mid-2025, moving from bundled employee allocations to a simple per-employee add-on model. This review covers the current pricing structure, what Xero Payroll includes, and how it compares to standalone payroll software for UK businesses.

Who Is Xero?

Xero is a New Zealand-founded cloud accounting platform with 4.3 million subscribers globally, known for its intuitive interface and extensive app marketplace.

Founded in 2006 in New Zealand, Xero has grown into one of the world’s largest cloud accounting platforms with over 4.3 million subscribers and 5,000 employees. The company won Forbes’ Most Innovative Growth Company in 2014 and 2015, and is widely used by UK accountants and small businesses.

Xero’s payroll module is an add-on to its core accounting software – not a standalone product. This means you need a Xero accounting subscription (from £16/month) before you can add payroll.

Xero Payroll Pricing

Xero Payroll costs £1.50/employee/month on Ignite, Grow, and Comprehensive plans, or £1.00/employee/month on Ultimate. Up to 200 employees supported.

Xero frequently offers introductory discounts (typically 50–90% off for the first 3 months). These apply to the accounting plan, not the payroll add-on. The payroll add-on is charged per employee per month with a maximum of 200 employees.

Cost examples by headcount:

• 5 employees (Ignite): £16 + £7.50 = £23.50/month (£282/year)
• 10 employees (Ignite): £16 + £15 = £31/month (£372/year)
• 20 employees (Grow): £33 + £30 = £63/month (£756/year)
• 50 employees (Comprehensive): £47 + £75 = £122/month (£1,464/year)

What Xero Payroll Includes

Xero Payroll includes HMRC RTI submissions, auto-enrolment, payslips, flexible pay schedules, employee self-service via the Xero Me app, and automatic accounting integration.

The payroll add-on is HMRC-recognised and covers everything a small UK business needs:

• HMRC RTI submissions – automatic Full Payment Submissions after each pay run
• Auto-enrolment – workplace pension management and PensionSync integration
• Payslip generation – automatic digital payslips for all employees
• Flexible pay schedules – weekly, fortnightly, four-weekly, or monthly
• Multiple pay rates – different rates for different roles or overtime
• Employee self-service – Xero Me app for payslips, leave requests, and personal details
• Timesheet integration – built-in timesheets that feed into payroll calculations
• Expense reimbursement – process employee expenses through payroll
• Accounting integration – payroll journal entries created automatically in Xero accounts
• Benefits tracking – track employee benefits and BIK reporting

The standout feature is accounting integration. After each pay run, Xero automatically posts journal entries to your accounts – employer NI, pension contributions, net pay, and PAYE liabilities all appear in your profit and loss statement without manual input.

Pros and Cons

Xero Payroll is the best choice for existing Xero users wanting affordable, integrated payroll. Non-Xero users should consider standalone payroll software instead.

Xero Payroll Reviews

Xero has a 3.3/5 rating on Trustpilot from 300+ reviews – users praise the interface and accounting integration but criticise the lack of phone support.

Xero has a mixed reputation on Trustpilot with 58% five-star reviews but 21% one-star reviews. The praise focuses on the intuitive interface and seamless accounting integration, while criticism centres on customer support response times.

Positive: “I have been a Xero user for many years. It just keeps getting better and is the best product on the market for my practice and my clients.” – Jane Van Tonder, Trustpilot

Critical: “Xero have almost non-existent customer service.” – Emily, Trustpilot

The support criticism is worth noting – Xero offers online support only (no phone). If responsive phone support is important to you, Sage Payroll offers UK-based phone support as standard.

Xero Payroll vs Alternatives

Xero Payroll is cheapest per employee but requires an accounting plan. Sage is cheaper standalone, and Moneysoft is the cheapest overall at £90/year.

Annual cost comparison for 10 employees:

• Moneysoft: £90/year (cheapest overall)
• Sage Payroll: £240/year (cheapest standalone cloud)
• Xero Payroll: £372/year (cheapest per-employee, but requires accounting plan)
• Staffology: £468/year

Xero Payroll only makes financial sense if you already use (or plan to use) Xero for accounting. If you do not need Xero accounting, Sage Payroll at £20/month is a better standalone option.

How to Contact Xero

Contact Xero via their online support centre, by email at [email protected], or through in-app support. Xero does not offer phone support.

• Support centre: central.xero.com
• Sales: [email protected]
• Support: [email protected]
• London office: 1 Bedford Avenue, London, WC1B 3AU
• Milton Keynes office: 500 Avebury Boulevard, Milton Keynes, MK9 2BE

Our Verdict

Xero Payroll scores 7/10 – excellent integration and competitive per-employee pricing, but the requirement for an accounting plan and lack of phone support limit its appeal.

Xero Payroll is the best payroll option for businesses already using Xero for accounting. The seamless integration eliminates double data entry, the per-employee pricing is competitive, and the Xero Me app gives employees self-service access to payslips and leave management.

However, it is not the right choice for everyone. If you do not use Xero accounting, the mandatory subscription (from £16/month) makes standalone alternatives like Sage Payroll or Moneysoft more cost-effective. The 200-employee cap and lack of CIS (without an extra add-on) also limit its suitability for larger or construction-focused businesses.

For a full comparison of UK payroll options, see our best payroll software roundup, our cheap payroll software guide, or our payroll costs breakdown.

Related payroll guides:

• Best Payroll Software UK
• Moneysoft Payroll Manager Review
• Staffology Review
• Payroll Costs Guide
• Cheap Payroll Software
• Best Outsourced Payroll Companies UK

Clara Wenslow

Finance & Business Services Editor

Clara analyses SME finance and procurement markets, covering business loans, invoice finance, payroll, and related B2B services. She ensures each comparison and guide is transparent and data-driven.

Reviewed by

Sarah Mitchell

B2B Commerce & Finance Reviewer