Xero Payroll review
A UK-focused payroll option with pension reporting, multiple pay schedules and Xero accounting plans.
Reviewed by iTechGuides Editors · Editorial team · Updated Oct 2026
Xero Payroll is cloud payroll software for UK small businesses that need to calculate pay and meet payroll reporting requirements. It suits businesses with employee, director or off-payroll worker payroll, particularly those that also want payroll included in a Xero accounting plan. Employees can use Xero Me to view payslips and P60s, check leave balances, and submit leave requests and timesheets. Access is available on web, iOS and Android.
HMRC and pension administration are central to the product. Xero Payroll submits Full Payment Submissions and Employer Payment Summaries, and calculates PAYE, NIC, pension contributions and leave. It supports weekly, fortnightly, four-weekly, monthly, quarterly and annual pay schedules, plus multiple pay calendars. Workplace pension assessment and provider reporting are included, as are payroll reports such as P32, P11 and pension reports. BACS/Faster Payments payment files, director NIC calculations and IR35 payroll support extend its coverage beyond standard employee pay. NEST and The People's Pension are named integrations.
Pricing depends on how payroll is purchased. Ignite payroll is £1.50 per person per month, charged separately from the Ignite accounting plan. Grow is £39 monthly with payroll for one person included; Comprehensive is £55 monthly for five people; Ultimate is £70 monthly for ten. Prices are in GBP and exclude VAT, and a 30-day trial is available. The higher accounting-plan prices make the per-person add-on more relevant for a small payroll, while businesses needing a broader accounting plan may prefer the included payroll allowance. Choose it for UK-specific HMRC and pension workflows within Xero; businesses seeking payroll without Xero accounting plans may want to compare alternatives.
Xero Payroll pros and cons
- Where it wins
- Files Full Payment Submissions and Employer Payment Summaries to HMRC
- Calculates PAYE, NIC, pensions and leave automatically
- Supports employees, directors and off-payroll workers
- Where it doesn't
- Ignite payroll costs £1.50 per person per month on top of accounting
- Grow, Comprehensive and Ultimate plans cost £39, £55 and £70 monthly
- Support channels listed are documentation and community
Xero Payroll fact sheet, pricing and score →
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