It’s the debate that rages through the halls of the accounting and HR departments of organizations across the country. Which payroll software is best for me – Xero or QuickBooks? There is no universal answer, as each brings a different set of advantages (and a few limitations) to the table. The answer, in true ambiguity, is, “it depends.” The good news is, you just stumbled upon a guide that will help you unpack these two popular payroll softwares and decide for yourself – armed with the facts, of course. So, let’s drill down on the ins and outs of Xero and QuickBooks so you can apply the details to your needs and gain the clarity you need to make the best decision for your business needs.

What is Xero Payroll?

Xero US payroll dashboard. Xero is a cloud-based accounting software that tous fast, simple, all-in-one functionality. This web-based payroll software is a top choice for businesses around the globe. The reasons that Xero Payroll has risen to the top of the payroll software marketplace include:
  • Affordability
  • Ease of use
  • Lots of out of the box features
Xero caters to small businesses with a simple and affordable three-tier pricing model that allows the small organization to scale up and scale down easily and as needed.

What is QuickBooks Payroll?

Quickbooks payroll dashboard. QuickBooks is a product of the larger corporation Intuit that produces other accounting and business-related softwares like TurboTax and Mint. QuickBooks Payroll is one of the most widely used payroll software products. With all that brand cache, it’s easy to see that QuickBooks has satisfied its customers with features such as:
  • Ease of use
  • Strong customer support
  • Robust functionality
QuickBooks with the power of Intuit behind it is able to capitalize on its brand prowess and market share to remain the leader in the space. It caters to small- and mid-size businesses and offers “big business benefits on a small business budget.”

Pricing for Xero vs. QuickBooks

Xero pricing plans

Xero’s pricing structure starts with a very low monthly cost for solopreneurs. This may not be enough for most businesses who will soon grow into the more advanced options, that are equally as affordable. It’s key to note here that the payroll module for Xero requires an additional investment for all three tiers.


For the solopreneur or small startup, an affordable per month is an attractive monthly cost. This tier includes the bare bones functions include like the ability to send quotes and 20 invoices as well as enter five bills per month and reconcile banking transactions. This option also allows you to capture bills and receipts with Hubdoc and view a snapshot of short-term cash flow.


For a business poised to scale, more functionality and more users are allowed at a still affordable monthly fee of $16. With this option you get additional unlimited quotes and invoices as well as the ability to perform bulk reconciliations.


For the larger and more established business, this option might fit the bill with functions like project tracking, multiple currencies and claim expenses Also Read: Xero vs. FreshBooks: 2021 Review

Quickbooks pricing plans

Quickbooks starts out at a higher price per month, but the core tool includes many features that you don’t get in the lowest Xero tier, including payroll.


Payroll features include automated tax and forms, automated payroll, health benefits for your team, expert product support, next-day direct deposit and QuickBooks Accounting.


You get the core features as well as same-day direct deposit, an HR support center, an expert review of key financials and the ability to track time on the go.


In the top tier of the QuickBooks payroll offering you get all of the above and project tracking on the go, tax penalty protection and a personal HR advisor. Also Read: QuickBooks vs. FreshBooks

Comparing Features – QuickBooks vs. Xero

QuickBooks and Xero have several commonalities. They’re both easy to set up and use, and many users report a low learning curve to get started. They also include the ability to create professional invoices quickly and easily, without employing a standalone invoicing software. Finally, the two also include dynamic mobile applications that allow on-the-go accounting.

Differences between QuickBooks and Xero payroll software

Companies will want to choose QuickBooks as their payroll software when they’re looking for more features for the price and if they need advanced reporting. QuickBooks is slightly more expensive than Xero, however, with that comes more value. Unlimited users and more bells and whistles can make QuickBooks a better choice for a company that needs more features. QuickBooks offers more robust and advanced reporting functionality as opposed to Xero. If keeping track of financials and creating customized reports is on the agenda, QuickBooks is your better option. Companies will want to choose Xero if they’re looking for just the basics from their payroll software or if they’re freelance or very small businesses looking for their first payroll software.If you don’t need bells and whistles, Xero can be a perfect option for you. At an extremely low price and with solid functionality, it might be simply everything you need for your bare bones payroll processing needs.Xero is a favorite for businesses in startup mode. Why? Because it works, it offers the basic functions you need, accountants know it and like it and it has the ability to scale with you as you ramp up your business.

Leading payroll solutions to consider

Choosing the right payroll software

Making the decision of payroll softwares can seem daunting but there are many videos and frequently asked questions (with answers) on both brands’ websites to help you perform your due diligence. Be sure to take into account your current needs as well as your needs as your business grows when making your decision. If you need help choosing between QuickBooks and Xero, or if you want some more clarity in choosing the right payroll software for your business, visit our payroll software Product Selection Tool. Enter your requirements and one of our unbiased Technology Advisors will contact you with up to five options that meet your needs.