Last updated June 2025
Latest News: Upcoming Xero price changes effective July 2025
Changes in Xero software pricing have been shaking up how Australian business owners run their payroll and accounting.
Xero has announced a new round of price increases for its Australian customers, taking effect from July 1, 2025. This change will impact the Grow, Comprehensive, and all Ultimate plans, with price hikes ranging from $5 to $27 per month, depending on the plan.
These latest price adjustments come on the heels of significant changes already affecting Xero users in Australia. From 1 July 2024, business owners and employers relying on the accounting software provider experienced a price increase for Xeroโs Payroll Only plan and the Starter, Standard, Premium 5, Ultimate 20, Ultimate 50, and Ultimate 100 subscriptions. Active Xero Payroll Only users started paying 33% more than the original plan price, from $15/mo to $20/mo.
By March 2025, Xero had completely discontinued the Payroll Only plan and transitioned all subscribers to a new set of plans. This change is part of a broader restructuring that includes introducing three new streamlined business plans: Xero Ignite, Xero Grow, and Xero Comprehensive. The Starter, Standard, and Premium 5 plans have also been phased out.
These updates follow a prior price increase on 13 September 2023, which resulted in plans becoming 5-38% more expensive for subscribed users. Additionally, Xero updated its Ultimate plan and moved Premium 10-100 subscribers to equivalent Ultimate plans, further limiting viable options for small businesses.
Xero monthly subscription cost and plan changes after 1 July 2025
| Plan | Price in 2024 | Price in 2025 | Status in 2025 |
|---|---|---|---|
| Payroll Only | $20/mo | โ | Discontinued |
| Starter | $35/mo | โ | Discontinued |
| Standard | $70/mo | โ | Discontinued |
| Ignite | $35/mo | $35/mo | Active |
| Grow | $70/mo | $75/mo | Active |
| Comprehensive | $90/mo | $100/mo | Active |
| Ultimate 10 | $115/mo | $130/mo | Active |
| Ultimate 20 | $145/mo | $162/mo | Active |
| Ultimate 50 | $200/mo | $222/mo | Active |
| Ultimate 100 | $245/mo | $272/mo | Active |
Deeper context on the Xero Payroll Only plan phase-out
With the total discontinuation of the Xero Payroll Only plan, subscribed users will need to transition to a different Xero plan or find an alternative payroll solution altogether to continue using the service.
Initially, Xeroโs Payroll Only plan was favourable for many small businesses in Australia. It allowed businesses with 1-4 employees to run payroll and report Single Touch Payroll (STP) to the Australian Taxation Office.
However, the recent changes now only accommodate payroll for 1 employee while increasing the price for interested subscribers through the new Ignite plan to $35/mo. If a business has more than 1 employee, it would need to pay even more, at least $75/mo for 2 employees, and $90/mo for 5 employees.
Discontinuing Xero Payroll Only plan & how it affects businesses
The three-year ongoing Xero price increases present a significant challenge for Australian small businesses, especially those that require only payroll services.
One user writes, โThis change doesnโt align with my business requirements and makes it worse. It raises the question: How does this alteration truly โbetter meet the needsโ of customers? Is Xero subtly nudging us toward higher-paying subscriptions?โ
Affected businesses now face two main options: upgrade to a more expensive Xero plan or switch to an alternative STP-compliant payroll provider. Alternatives like Payroller offer free payroll and STP reporting for one employee, affordable paid plans, and features such as timesheets, rosters, and leave management, making them attractive options for businesses seeking cost-effective solutions.
While switching software providers can be disruptive, calculate the long-term savings a new provider might offer. By being proactive, small businesses can navigate these changes and find a cost-effective solution for their payroll needs.
Learn more about payroll reporting: ato.gov.au.
Considering payroll-only software alternatives
If you are one of the businesses that have been impacted by the pricing changes of the Xero Payroll Only plan, consider exploring other payroll solutions that are STP-compliant and budget-friendly.
Hereโs where Payroller steps in as a strong payroll-only software contender.
Payroller is a user-friendly payroll software designed specifically for the needs of small businesses. It offers a compelling package with features like:
- Free payroll & STP reporting for 1 employee
- Affordable paid plans
- Web and mobile accessibility
- Free accountant access with Payroller Pro
- Dedicated employee app with Payroller Employee
- Super guarantee payments via Beam
- Employee timesheets and time tracking
- Staff rosters
- Attendance and leave management
For a limited time, Payroller is offering a bonus of 99 cents per user for the first 3 months. Along with this offer, Patroller provides a 7-day free trial to let you explore the platform and its features before committing. Additionally, a 30-day money-back guarantee provides peace of mind.
Find out more about payroll: Investopedia.
For a limited time only, Payroller agents can double their referral bonus for every client that gets an annual subscription. Earn $100 for every client that switches from Xero to Payroller, the best Xero alternative for small businesses. Importing Xero records to Payroller is easy and doesn’t interrupt the payroll process. Terms & conditions apply.
Critical takeaways
Xero’s decision to hike prices and phase out the Payroll Only product presents a significant challenge for Australian small businesses. Hereโs a quick recap:
July 2025 Price Hikes: Xeroโs Grow, Comprehensive, and Ultimate plans will see price increases, effective July 1, 2025
Payroll Only, Starter, and Standard Phase-Out: These plans were phased out as of March 2025, forcing users to more expensive plans.
Impact on Small Businesses: Higher costs and fewer affordable options for payroll compliance. Consider switching to dedicated payroll providers like Payroller for cost savings and tailored features.
Explore a Xero alternative like Payroller, which offers STP compliance, budget-friendly pricing, and a seamless pay run workflow. By taking control, small businesses can navigate these changes and find a payroll-only solution that fits the budget.
