Xero Payroll review

Xero does not sell payroll on its own in the UK: it comes inside the accounting plans. Grow costs £39 per month excl. VAT and includes payroll for one person, Comprehensive at £55 covers five people and Ultimate at £70 covers ten, with extra people at £1.50 each per month, or £1 on Ultimate. Xero was offering 10% of the price for the first 6 months when we checked. Xero states that it is HMRC-recognised payroll software that sends an FPS after every pay run and an EPS for each tax period, and it calculates PAYE and National Insurance from each employee's tax code, NI category and pension details, along with student loans, directors' NI, statutory pay and small employers' relief. CIS and off-payroll workers are covered too. Staff check payslips and P60s and request leave in the Xero Me app. For a sole director or a small team already on Xero this is the least effort. Payroll-only buyers will pay less elsewhere.

Who it is for

small UK businesses that keep their accounts in Xero

Price

See vendor pricing (USD check pending). Xero's UK page lists Grow at £39 per month excl. VAT with payroll for 1 person, Comprehensive at £55 for 5 people and Ultimate at £70 for 10 people.

US price check pending. See the vendor pricing page.

Key features

• Sends an FPS after every pay run and an EPS for each tax period
• Payroll for 1 person on Grow, 5 on Comprehensive and 10 on Ultimate
• Extra people at £1.50 each per month, or £1 on Ultimate
• Payslips, P60s and leave requests in the Xero Me employee app
• Statutory pay, student loans, directors' NI, small employers' relief, CIS and off-payroll workers

Strengths and weaknesses

• Strength: Payroll totals post directly to Xero accounting
• Strength: Introductory price of 10% for the first 6 months on paid plans
• Strength: Workplace pensions and employee self-service included
• Weakness: Payroll is only an optional add-on on the Ignite plan
• Weakness: You pay for the accounting plan even if you only need payroll
• Weakness: Payments beyond the included number cost £0.20 each by bank transfer

Key facts

• Payroll included: 1 person (Grow), 5 (Comprehensive), 10 (Ultimate)
• Extra people: £1.50 per person per month (£1 on Ultimate)
• Employee app: Xero Me
• RTI to HMRC: Yes, FPS after every pay run

Where it ranks

Xero Payroll is No. 5 in our Best Payroll Software in the UK verdict.