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As a Xero Partner working exclusively with Xero, I can report that in the last 2 months I have lost 80% of my potential clients/ potential new Xero customers, as a result of the Xero Pricing Plan. This is Xero's loss as well as my loss.

The package structure means the the Xero discussions with potential clients are driven purely by how many people will be on the Payroll, whereas previously it revolves around whether clients needed foreign currency.

This means that brand new companies are unlikely to choose Xero as their first software because there will be at least one Director on the payroll.

The changes in NIC rules will make the situation even worse as they may encourage more of the smallest businesses to take on part time staff to take advantage of the lower NI Employment Allowance threshold and totally mitigate the Ers NIC increase.

The menu pricing system was one of the aspects which made Xero a wininer!

I don't want to move my business away from Xero, but I will be forced to move all my clients to an alternative Payroll provider from April 2025, in order that I can keep attracting new clients to Xero. This is a real shame, especially when you consider the recent improvements with XPM Payroll, but from a commercial perspective, growth is key.

Absolutely agree - we are a small (micro) business with one casual employee during busy times (don't laugh, we run a local history museum - sometimes we are busy)!
Anyway it's an absolute pain to have to upgrade and pay double the cost of our current Xero plan just to be able to employ our one amazing casual person. I'd rather give my $ to a real person than a piece of subscription software...
If Xero can provide the Payroll option as an add-on for the bottom level (Ignite) plan that would be great, and very encouraging for microbusinesses like us (and our employee would be thankful too!)
Cheers
Fi

Hi Xero and Xero Customers,
I am a little disappointed that in order to have Payroll in the Xero suite for our small business we are expected to pay twice as much monthly as we currently are. (We are currently on the Ignite plan which does not include Payroll capabilities - I was happily using Payroll on our old plan until it changed over to Ignite recently).
It would be nice if there was a plan option between Ignite and Grow that includes a Payroll function, or an option to add Payroll to Ignite for a small fee (much like there is a $5/month fee to add additional users expenses on the Grow plan).
I'm a small (probably you could say a "micro") business owner who engages a casual employee when we are really busy. I don't know if anyone else has any thoughts about this but I think it would be encouraging for small businesses if they knew they could employ one person without having to upgrade their plan at double the monthly cost.
Cheers!
Fiona

In regards to the "Grow" plan ($70 AUD per month), we would like to comment that the restriction of being able to pay only one employee is quite unreasonable, especially when paying $70 per month for a Xero subscription.

Considering the cost of the plan, we would have thought it would support paying multiple employees. It certainly undermines the value of the plan for a growing business.

Xero have confirmed the move to "Ultimate" at an additional cost of £21/month, all with features I don't use. It's an unsustainable increase. Can anyone recommend a decent payroll package to use alongside a Xero basic plan?

If in NZ look into Smartly, I've removed payroll from Xero and now am considering dropping down to the starter plan as I don't have many invoices each month. Also really enjoying the smartly experience, they handle the bank transfers to staff and IRD as well as the paperwork.

I've just asked Xero about this - here in NZ we are being forced off our Standard + Payroll to the Ultimate just because we have 8 staff. A 30% increase!!!
Like others, we don't use Expenses, Analytics, Currency or Projects. I asked the 'support' staff member to please reconsider adding back in the ability to add additional staff for the nominal cost ($1/person in NZ). By capping the number of employees they've totally got us cornered to having to subscribe to a plan way beyond anything I'm sure a significant number need. Revenue gathering? Not happy!

We have many clients that use the starter package with payroll as they have no need for mass invoicing and bills and now once they roll to ignite they wont have the option of payroll - that is absolute madness - these small businesses are not going to want nor afford to upgrade to $75 per mth - that is close to dbl what they are paying. Xero you need to enable payroll to the smaller packages!

I've moved to Smartly as it will work out slightly cheaper than moving to a higher plan, and they let you automate regular payroll, which will save a heap of time and stress.

The new pricing plan looks like quick plan to increase sales for Xero.
We should be allowed to pick feature (module) that we need, not forcing us to pay for something that we don't use.

We are small business and there is no need for extra feature (module) expense claim and project, yet because i want to do the right thing to process casual employment in Xero, now I have to pay extra $30/month just to process extra 3 employee.

I am really unhappy with the way Xero manage their pricing plan.
Although Xero is a great product, I don't agree with the way the company just move us to new plan and force us to accept additional features that we don't need. It makes me think if you can do it now, what stopping the company to do it again in future. I am considering to move all our subscription to another software.

Xero need to do more plans, look into different level for payroll
there are too big jump from 25 to 50 employees

As a charity, some of our “employees” (part time cafe workers looking after vulnerable adults) are paid less than the new Xero fee!

We use an ethical bank (CoOp) which Xero doesn’t integrate with, so none of the bill integrations work. Essentially this is just a massive price rise.

As a volunteer admin myself it’s just another example of big businesses having no social conscience.

Absolutely agree. In order to run payroll for 8 people, I'm having to move from standard +3 payroll at £38/month +vat to "Ultimate" at £59/mth plus vat. Ridiculous. I don't want bill pay, expenses, or anything else they are plugging, just the ability to run payroll for 8-10 people, plus the usual accounts package. I'll be looking at Quickbooks unless this is sorted.

I am in the process of switching to a different accounting package as our business cannot afford the new pricing structure. For a small business in hospitality with around 16 employees (mostly school leavers and students) which changes a lot over the year, our costs are going up from £47 per month to £65 +VAT. Our business cannot sustain this increase.

I sat all weekend watching different videos on YouTube to see the functions other programs can offer and with all the changes Xero is making our lives more difficult to navigate things that was really easy.

Sorry Xero, but I am moving my three companies somewhere else.

Always prices rises and removing features! I will also be looking at other options now.

my client uses standard + payroll currently for 7 employees
Under the new pricing plan he has to upgrade to ultimate at an increased cost of $22/mth for additional stuff he will not use like multicurrency, projects, expenses and analytics . PLEASE ADD PAYROLL TO THE LOWER PLANS.
I think this looks like a revenue gathering exercise for xero.

Agree 100% - I am currently on the Standard Plan (AUD $70 per month) and to maintain payroll for 2 persons you expect me to go to the Comprehensive Plan (AUD $90 per month).

Please re-consider this decision.

Leave add-ons as an option in new subscription plans

Feeling like being forced into an almost 80% increase in price for the equivalent subscription as what i have now, just to add one employee is a bit excessive. Please bring back add-ons!

Vicariously increasing the subscription by forcing users to a higher plan, especially given the ATO's STP reporting requirements. Please also explain how you will migrate customers currently using payroll in the starter or standard plans?

I'm on the Standard plan and have 6 people on the payroll. I only use the basic functionality such as VAT, bank reconciliation and payroll and am told I will be moved to Ultimate, nearly doubling my costs. So I am one of many that will definitely leave Xero. I have been happy with Xero to date but they have now forced me to look about and Quickbooks looks really competitive for what I need.
The best SaaS offerings allow people to choose and pay for only what they need. They don't thrust features at you that you don't want and make you pay for them. Someone at Xero really doesn't know their customers and has no grasp of SaaS models and strategy.

I personally think Xero has misread their market with the new plans - there are many small businesses on the "Starter" plan and require payroll for 1 person. Their plan will migrate to the new "Ignite" and they will no longer have payroll, similarly businesses using "Standard" with payroll for 2 will migrate to "Grow" and only have payroll for 1 person. Yet there has been no change to the payroll functionality in the Comprehensive plan.

Xero, please reconsider and reinstate the payroll functionalities in the Ignite and Grow plans to match the Starter and Standard plans, especially as the migration will occur part way through the financial year.