Annual cost (10 employees)
FreePayroll£0Xero Payroll£446.40
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XeroFree payroll software vs £446.40/year for 10 employees.
Xero Payroll is a paid add-on on top of a Xero subscription. Using Ignite at £16/month plus payroll at £1.50 per person puts a 10-employee team at £446.40/year inc VAT. FreePayroll is free — for every employee, every pay run, forever.
Employee limit
FreePayrollUnlimitedXero PayrollPer person fee
Accounting sub required?
FreePayrollNoXero PayrollYes
What does it actually cost?
These figures use Xero Ignite at £16/month plus payroll at £1.50 per employee per month. Default view includes VAT.
Employees
Xero Payroll
Xero Payroll1 employee£0 / year£252 / year
5 employees£0 / year£338.40 / year
10 employees£0 / year£446.40 / year
25 employees£0 / year£770.40 / year
50 employees£0 / year£1,310.40 / year
100 employees£0 / year£2,390.40 / year
Default view includes VAT at 20%. Base Xero figures use Ignite at £16/month ex VAT. Payroll is optional on Ignite, Grow and Comprehensive at £1.50 per person. Introductory and one-off discounts are excluded. Pricing checked on March 27, 2026.
Feature comparison
FeatureXero Payroll
Xero PayrollAnnual costFree foreverFrom £252/year inc VAT
Per-employee pricingFlat rate — unlimited employees£1.80/person/month inc VAT
Accounting subscription requiredNo extra softwareRequires Xero plan
Unlimited payrolls
HMRC FPS & EPS submissions
Tax and NI calculations
Weekly, fortnightly, four-weekly & monthly pay runs
Custom payments & deductions
Bulk import employees & pay data
Reopen & correct previous payrolls
Payroll health alerts before submission—
Auto EnrolmentAll-in-one, no cost or setupSeparate account, extra fees, integration risk
Sick leave (SSP)
Maternity & paternity leave (SMP, SPP)
Statutory Bereavement Pay (SBP)—
P45, P60 & year-end documents
Xero journal integrationProNative
Sage journal integrationPro—
The honest difference
FreePayroll
Built as a standalone payroll product — no accounting subscription required. Core payroll is free forever, with no employee limit. Auto Enrolment is fully built in through Collegia Pension — you don't need to set up a separate pension provider account or configure an integration. It just works, every pay run.
Who FreePayroll is best for
UK businesses that want dedicated, compliant payroll software without paying for an accounting platform. Ideal for SMEs running their own payroll who don't use Xero — or who do use Xero for accounting but want to keep payroll costs at zero.
XeroXero Payroll
A payroll add-on within the Xero accounting ecosystem. Works best if you're already a Xero customer and want payroll in the same platform. Charged at £1.80/employee/month inc VAT on top of your existing Xero plan — costs grow directly with your headcount.
Who Xero Payroll is best for
Businesses already deeply embedded in the Xero ecosystem who value having payroll inside the same platform as their accounts. The per-employee cost is manageable at small team sizes but adds up quickly as you grow.
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