Xero

Xero starts at £16/mo (Ignite) for the Ignite plan, which covers up to 20 invoices per month with unlimited bank feeds. The mid-tier Grow plan is £37/mo (Grow) with unlimited invoicing, and the Comprehensive plan adds multi-currency and project tracking. The top Ultimate plan is £65/mo (Ultimate). Prices are excl. VAT and plans are month-to-month.

Yes, PAYE and RTI payroll is built into every Xero plan, with a handful of seats included before a small per-employee charge applies (~£1.50/emp). This covers Real Time Information submissions to HMRC, pension auto-enrolment, and leave management for UK employees.

Xero allows Unlimited users on every plan. There is no per-seat charge, so you can invite your bookkeeper, accountant, and as many team members as you need without an increase in your monthly subscription.

Yes. Xero is HMRC-recognised for Making Tax Digital and supports direct VAT return filing. VAT is calculated automatically as you code transactions, and you can submit your return from within Xero without exporting to a separate system.

The Ignite plan includes Unlimited bank feed connections. This suits businesses with multiple accounts, credit cards, or loan facilities from the entry tier.

Xero's entry plan sits above FreeAgent's sole-trader pricing but is broadly comparable to Sage's Standard tier once payroll is factored in. Xero's advantage is unlimited users on every plan and payroll built into every tier rather than sold as an add-on. The better fit depends on whether you value FreeAgent's simplicity for a small limited company, Sage's UK heritage, or Xero's larger third-party app ecosystem.

No. Xero is available on a rolling monthly subscription with no lock-in contract. You can upgrade, downgrade, or cancel at any time. An annual billing option is not offered by Xero UK; the pricing shown is always month-to-month.

Xero payroll starts from £37/mo (Grow) and includes 1 employee at that tier. Additional employees are charged at £1.50/emp/mo each. Unlike Xero's pricing in some other markets, UK payroll is not bundled into every plan, so check which tier you need before assuming payroll is included.

Yes. Xero is on HMRC's recognised payroll software list and submits Full Payment Submissions under RTI for every pay run. It also handles auto-enrolment into a workplace pension, integrating with NEST and other major pension providers to calculate and submit contributions automatically as part of the standard pay run.

Yes, but only as an add-on rather than a built-in feature. UK construction businesses that need to deduct and report Construction Industry Scheme payments to subcontractors must activate the CIS add-on on top of their Xero payroll subscription, rather than it being included by default.

Xero includes JAX, its native AI assistant, built into the platform for payroll and accounting tasks. Xero also publishes an official MCP (Model Context Protocol) server, one of the few payroll providers in this comparison to do so, letting AI agents connect directly to Xero data rather than relying on third-party workarounds.

Xero payroll suits businesses already using Xero for accounting who want payroll in the same subscription rather than a separate system. Rated 4.4 out of 5 on Capterra from 3,299 reviews, it particularly suits small to mid-sized UK businesses that value accounting, invoicing, and payroll under one login with 24/7 online support.

Yes. Xero calculates statutory sick pay, maternity and paternity pay, and other statutory leave entitlements within each pay run, and generates P60s at the end of the tax year along with P45s when an employee leaves. These compliance documents are produced automatically as part of the standard payroll workflow.