Xero Subscription Plans and Costs for 2025: A Complete Breakdown

Running a small business in 2025 means carefully monitoring the costs of accounting software. Many business owners ask, “What is the current price of Xero?” With the latest updates to Xero pricing in Australia, subscription changes and new features included, it is important to understand the cost of using Xero.

This guide will explain:

• The current Xero subscription fees and updates for 2025
• The features included in each Xero business plan
• Practical advice on managing payroll costs and users in Xero
• Comparisons with other accounting software and bookkeeping options for small businesses

Key takeaways

• Xero offers four main plans in Australia: Ignite, Grow, Comprehensive and Ultimate, each tailored to different business needs.
• From July 1, 2025, the Ignite plan remains steady at $35 per month.
• The Grow, Comprehensive and multiple Ultimate tiers (such as Ultimate 10, 20, 50, 100) experienced price increases ranging from $5 up to $27 monthly, depending on the plan.
• All plans now include integrated payroll functionality, automation tools and simplified Xero payment options.
• Payroll inclusion also covers auto superannuation payments, complying with updated Australian regulations.
• Additional users on plans cost approximately $5 to $7 each per month.
• Xero encourages businesses to regularly review their subscriptions to remove inactive users or consider switching to lower tier plans to reduce expenses.
• Xero’s pricing is competitive and suited for growing businesses that require scalability, multi-user access and advanced features when compared with alternatives like FreshBooks and Zoho Books.
• The Payroll Only plan has been discontinued as of 2025, with payroll now included in all main plans, with limits on number of employees per plan: e.g., Xero Ignite allows payroll for 1 person, Grow for 2 and so on.

Xero Pricing and Plans for Australian Businesses

Xero has become one of the leading accounting software providers globally. The platform offers cloud-based solutions that help businesses manage their finances effectively. However, understanding how much does Xero cost requires examining various plans and features available.

The Xero accounting software cost varies depending on your business size and requirements. From sole traders to established enterprises, Xero plans cater to different organisational needs. Let’s explore the complete pricing structure and what each plan offers.

Xero Plans and Costs Structure in Australia (Updated 2025)

Xero offers four main business plans in Australia:

• Ignite: AUD 35/month
• Grow: AUD 75/month
• Comprehensive: AUD 100/month
• Ultimate 10: AUD 130/month
• Ultimate 20: AUD 162/month
• Ultimate 50: AUD 222/month
• Ultimate 100: AUD 272/month

Note: All prices include GST. Additional users beyond the plan limit cost around AUD 5–7 per user per month. The platform retains the right to adjust pricing, so always verify current rates on the official Xero website.

Xero Plans detailed breakdown and features

Plan	Monthly Price (AUD)	Invoices	Bills	Users Allowed	Payroll Included	Payroll Limit (Employees)	Forecasting
Ignite	$35	20	5	1	Basic	1	30 days
Grow	$75	Unlimited	Unlimited	5	Yes	Up to 5	30 days
Comprehensive	$100	Unlimited	Unlimited	5	Yes	Up to 5	90 days
Ultimate 10	$130	Unlimited	Unlimited	10	Yes	Up to 10	180 days
Ultimate 20	$162	Unlimited	Unlimited	20	Yes	Up to 20	365 days
Ultimate 50	$222	Unlimited	Unlimited	50	Yes	Up to 50	Full Year
Ultimate 100	$272	Unlimited	Unlimited	100	Yes	Up to 100	Full Year

Xero Subscription Cost Increases in 2025

From 1 July 2025, Xero implemented significant price increases across multiple business plans. These changes affect most mid-tier and premium subscriptions. Understanding these adjustments helps businesses budget appropriately.

Price comparison table

Plan	Previous Price	New Price (July 2025)	Increase Amount	Percentage Increase
Ignite	$35	$35	$0	0%
Grow	$70	$75	$5	7.1%
Comprehensive	$90	$100	$10	11.1%
Ultimate 10	$115	$130	$15	13.0%
Ultimate 20	$145	$162	$17	11.7%
Ultimate 50	$200	$222	$22	11.0%
Ultimate 100	$245	$272	$27	11.0%

The Ignite plan remains unchanged at $35 monthly. However, businesses using higher-tier plans face increases ranging from $5 to $27 per month. These changes reflect ongoing platform improvements and enhanced features.

What’s included in Xero subscription fees?

Xero justifies the July 2025 price increases through continuous platform enhancements. The Xero subscription costs now include several advanced features across all business plans, providing better value despite increased prices. Understanding these additions helps businesses assess the overall value proposition and budgeting.

Enhanced Features from June 2025

From 1 June 2025, Xero included payroll and automated superannuation (auto super) were integrated into all business plans. These features were previously optional add-ons that incurred additional costs. This change means:

• Businesses get comprehensive payroll processing features included in the subscription fees.
• Automated handling of super payments seamlessly integrated with compliance to Australian regulations.

Key improvements include:

• Enhanced analytics powered by Syft, delivering deeper business insights to aid strategic decisions.
• Advanced forecasting tools with extended forecast periods up to 180 days, enabling better cash flow and financial planning.
• Improved cash flow insights with real-time dashboards for tracking and managing cash more effectively.
• Comprehensive reporting features for informed decision-making
• Xero super integration across all plans, ensuring super contributions are managed accurately and effortlessly within the payroll system.

These enhancements aim to help businesses make data-driven decisions. The improved dashboards provide real-time visibility into financial performance, supporting better strategic planning.

Additional notes:

• With payroll included in the plans, businesses save on the previous costs of separate payroll add-ons or third-party software.
• These improvements align with Xero’s investment in automation tools, compliance features (like STP Phase 2) and security enhancements.
• The pricing changes reflect not just the software upgrades but also Xero’s commitment to supporting Australian small business needs with accounting software pricing that includes robust payroll and payment management.

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Xero Starter Plan Features

The Ignite plan serves as the Xero starter plan for self-employed individuals and sole traders. At $35 monthly, it offers essential accounting basics to simplify administrative tasks. This entry-level option remains unaffected by 2025 price increases.

The plan supports one user and includes:

• Up to 20 quotes and invoices monthly
• Ability to enter 5 bills
• Basic reconciliation features
• 30-day cash flow forecast
• Mobile app access
• Bank feed connectivity
• Payroll for 1 employee, including automated superannuation payments (auto super)
• GST management and BAS lodgment
• Integration with Hubdoc for capturing bills and receipts

For sole traders with limited transactions, this plan provides adequate functionality. However, businesses experiencing growth may quickly outgrow these limitations and require upgrading to more comprehensive options.

Xero Business Plans for growing companies

The Grow plan represents the middle tier suitable for expanding businesses. At $75 monthly, it removes transaction limits and supports multiple users. This plan offers the best value for small businesses automating their accounting processes.

Grow Plan advantages

Businesses using the Grow plan benefit from:

• Unlimited invoices and quotes
• Unlimited bill management
• Support for up to 5 users
• Comprehensive payroll features
• 30-day forecasting capabilities
• Additional users at $5 each monthly

The Comprehensive plan at $100 monthly extends forecasting to 90 days. It maintains the same user limits but provides more sophisticated financial planning tools for businesses requiring detailed cash flow projections.

Xero Standard Plan and Premium Options

Ultimate plans cater to established businesses with multiple employees. These Xero business plans offer advanced features, extended forecasting and higher user limits. Pricing scales according to user requirements.

Ultimate Plan comparison

Feature	Ultimate 10	Ultimate 20	Ultimate 50	Ultimate 100
Monthly Cost	$130	$162	$222	$272
Included Users	10	20	50	100
Forecasting Period	180 days	180 days	180 days	180 days
Additional Users	$7/user	$7/user	$7/user	$7/user
Payroll	Full	Full	Full	Full

Note: Ultimate plans provide extended 180-day forecasting capabilities. This feature helps larger organisations plan strategically with greater visibility into future financial positions. The increased user allowances support growing teams efficiently.

Xero Payroll Costs and additional features

All 2025 Xero plans include comprehensive payroll functionality. Previously, payroll incurred separate usage charges. The integration of payroll and auto super adds significant value to Xero subscription fees.

Payroll features encompass:

Businesses previously paying separately for payroll now benefit from consolidated pricing. This simplification reduces complexity in budgeting for small business accounting cost requirements and ensures compliance with Australian tax and employment laws.

These payroll capabilities make Xero a preferred choice for Australian businesses seeking efficient and compliant payroll management integrated within their accounting system.

Streamline compliance and costs, discover outsourcing payroll processing services for hassle-free Xero payroll management.

Xero payment options and billing

Xero offers flexible payment options for subscription management. Businesses receive invoices at the end of each monthly billing period. Payment processes automatically using stored payment details.

Payment processing details

Subscriptions auto-renew monthly until cancellation. Users can update their plan anytime after the initial month. If downgrading to a less expensive plan, changes take effect one month after upgrading.

Additional charges may apply for:

• Extra user licences beyond plan limits
• Chargeable direct bank feeds
• Xero Projects usage
• Xero Expenses functionality
• Premium support services

The platform accepts various payment methods including credit cards, debit cards, direct debit, Apple Pay, Google Pay, digital wallets and PayTo (Australia’s real-time payments platform). Businesses should review their payment details regularly to ensure uninterrupted service.

Xero also offers Tap to Pay on iPhone, allowing Australian small businesses with Stripe accounts to accept contactless payments directly via mobile phones without additional hardware.

Small Business Accounting cost comparison

Understanding accounting software prices helps Australian businesses make informed decisions. Comparing Xero with alternatives provides perspective on value and functionality. Each platform offers different strengths and pricing structures for the Australian market.

Xero vs FreshBooks Pricing

When choosing accounting software, finding the right balance between cost, features and scalability is essential. Xero and FreshBooks serve different business needs in Australia, from growing SMEs to freelancers and sole traders.

Feature	Xero (Australia)	FreshBooks (Australia)
Starting price	AUD 35/month (Ignite)	AUD 24/month (Lite)
Mid-tier price	AUD 75/month (Grow)	AUD 36/month (Plus)
Premium price	AUD 100/month (Comprehensive)	AUD 75/month (Premium)
Payroll	Included in all main plans	Payroll as add-on
Included users	1 to 5 users depending on plan	Single user
Invoice limits	Unlimited from Grow plan	Varies by plan
Best for	Growing SMEs needing scalability and integrated payroll	Freelancers and solo service providers

Xero vs Zoho Books comparison

Zoho Books and Xero are popular accounting solutions to different Australian business sizes and budgets. Zoho shines with affordability and automation for startups, while Xero offers robust payroll and forecasting for growing companies.

Feature	Xero (Australia)	Zoho Books (Australia)
Starting price	AUD 35/month (Ignite)	Free for revenue < AUD 50k / AUD 15/month (Basic)
Mid-tier price	AUD 75/month (Grow)	AUD 38.5/month (Standard)
Premium price	AUD 100/month (Comprehensive)	AUD 93.5/month (Professional)
Payroll	Included in all main plans	Available in higher plans
Included users	1 to 5 users depending on plan	1 to 5 users depending on plan
GST & tax Features	Integrated GST & payroll	GST handling, BAS-ready
Best for	Businesses needing comprehensive accounting & payroll	Startups and micro-businesses seeking affordable, simple solutions

Accounting tools for Small Business evaluation

Selecting appropriate accounting tools for small business operations requires careful consideration. Beyond pricing, businesses should evaluate features, scalability and integration capabilities. The right choice depends on specific operational requirements and growth plans.

Key evaluation criteria

When comparing accounting software prices and options, consider:

• Feature requirements: Assess which features your business genuinely needs. Avoid paying for unnecessary functionality that adds complexity without delivering value.
• User scalability: Consider how many team members require access. Evaluate whether user costs remain reasonable as your team grows.
• Integration ecosystem: Review available integrations with existing business tools such as CRM, payment gateways, inventory systems, or POS. Seamless connectivity reduces manual data entry, improves data accuracy and enhances operational efficiency.
• Compliance support: Select a platform that supports payroll and business reporting requirements, helping Australian businesses maintain up-to-date workforce records and meet regulatory standards without additional complexity
• Support quality: Evaluate available support channels, including phone, chat, email and community forums. Fast response times and knowledgeable support are crucial for resolving technical issues and getting timely guidance.
• Mobile accessibility: Consider mobile app functionality if you manage finances on the go. Comprehensive mobile features, including invoice creation, payment tracking and bank reconciliation, improve accessibility and responsiveness, supporting modern business workflows.

Managing Xero Subscription Costs effectively

Businesses can implement several strategies to optimise their Xero accounting pricing expenditure. Understanding plan features and usage patterns helps identify the most cost-effective configuration.

Cost optimisation strategies

• Right-size your plan: Review actual usage regularly. If you’re not utilising advanced features, consider downgrading to save costs without sacrificing essential functionality.
• Monitor user licences: Track active users and remove unnecessary access. Inactive users still incur charges, so maintain up-to-date user lists.
• Annual payment consideration: Some software providers offer discounts for annual payments. Check if Xero provides such options in your region, as annual billing can offer up to 10-15% savings.
• Leverage included features: Maximise value from included functionality before purchasing add-ons. Many features offer more capability than initially apparent.
• Review alternative providers: Periodically compare Xero cost against competitors. Market dynamics change and alternative solutions may offer better value.
• Utilise Xero Advisor network: Engage Xero-certified advisors or accountants who can help tailor plan options and identify cost-saving opportunities.

Impact of July 2025 price changes

The 1 July 2025 Xero subscription fee increases affect most business plans. Firms must decide whether to absorb costs or pass increases to clients. This decision impacts both profitability and client relationships.

Strategic response options

Accounting firms and businesses face several options:

• Absorb the increase: Maintain current pricing to preserve client relationships. This approach protects goodwill but reduces profit margins on Xero-related services.
• Pass through costs: Increase client fees to match Xero subscription prices. This maintains margins but requires clear communication to minimise client dissatisfaction.
• Add service margin: Increase fees beyond the Xero price rise. This approach improves margins but needs careful justification and positioning.
• Review service packages: Restructure offerings to include Xero subscriptions within broader service bundles. This provides clearer value proposition and reduces price sensitivity.

Successful firms communicate changes proactively. Early notification gives clients time to adjust budgets and understand the reasons for increases. Transparency and clear communication build trust and reduce negative client reactions.

Preparing for future Xero pricing changes

Software pricing evolves continuously. Establishing systematic processes for managing Xero subscription fees helps businesses adapt efficiently. Proactive planning reduces disruption and maintains profitability.

Best practice framework

Leading firms implement;

• Clear pricing policy: Document whether to absorb, pass through, or margin Xero costs. Consistent policies ensure fair treatment across clients.
• Automated billing systems: Use tools that automatically adjust client charges when Xero prices change. Automation reduces errors and administrative burden.
• Regular client communication: Maintain ongoing dialogue about value delivered. This context makes price adjustments easier to accept.
• Value demonstration: Regularly showcase benefits clients receive from Xero. Understanding value reduces price sensitivity and improves retention.
• Plan monitoring: Track Xero plan changes and announcements. Early awareness enables proactive planning rather than reactive scrambling.

Government resources

Australian businesses using Xero must maintain adherence with regulatory requirements. Understanding relevant obligations ensures proper financial management and avoids penalties.

The Australian Government authority provides comprehensive guidance on digital record-keeping and custom obligations. Visit ato.gov.au for authoritative information on:

• Single Touch Payroll requirements
• GST reporting obligations
• Business Activity Statement lodgement
• Custom file number declarations
• Meeting superannuation (retirement fund) responsibilities

Xero’s built-in features support these requirements, including automated STP reporting, custome calculations, BAS preparation and superannuation processing. However, businesses remain responsible for accurate reporting and timely lodgement. Engaging professional accounting advice or Xero-certified advisors ensures you meet all obligations correctly and efficiently.

Xero Subscription Prices: Value Assessment

Evaluating whether Xero subscription costs represent good value requires holistic analysis. Consider time savings, error reduction and improved financial visibility alongside monetary costs.

Value calculation framework

Assess value by comparing:

• Time savings: Calculate hours saved through automation versus manual processes. Multiply by your hourly rate to determine monetary value.
• Error reduction: Estimate costs of financial errors under previous systems. Improved accuracy delivers tangible savings beyond subscription fees.
• Better decision-making: Quantify benefits of improved financial insights. Timely data enables better strategic choices that improve profitability.
• Scalability benefits: Consider costs of changing systems as you grow. Choosing scalable platforms avoids expensive migrations later.
• Support and training: Factor in included support value. Responsive assistance reduces downtime and improves productivity.
• Adhering to Australian guidelines: It’s also important to choose software that works well with Australian guidelines and makes it easier to handle employee payments, sales charge and business reporting.

Alternative Accounting Software options

While Xero dominates the Australian market, alternative platforms merit consideration. Different solutions suit different business types and preferences. Evaluating alternatives ensures you select the optimal platform.

Sage Intacct consideration

Sage Intacct targets mid-market and enterprise businesses requiring advanced functionality. Pricing typically exceeds Xero but includes sophisticated features for complex operations.

Sage Intacct strengths include:

• Advanced financial consolidation
• Multi-entity management
• Customisable reporting dimensions
• Robust API for integrations
• Industry-specific solutions

However, implementation costs and complexity, including a steeper learning curve and required finance expertise, often make Sage Intacct unsuitable for small businesses. The platform works best for established organisations with dedicated finance teams managing complex financial operations.

For Australian businesses, Sage Intacct offers superior scalability and multi-entity support not available in Xero, making it a preferred choice for enterprises with more sophisticated needs and growth ambitions.

Making the final decision

Choosing accounting software represents a significant business decision. The right choice balances functionality, cost and ease of use. Consider your current needs while allowing for future growth.

Decision framework

Evaluate potential platforms against:

• Current requirements: Does the software handle your immediate accounting needs effectively? Ensure core functionality meets your daily operational requirements, including invoicing, payroll, compliance and reporting.
• Growth trajectory: Will the platform scale with your business? Consider whether you’ll outgrow limitations or face expensive migrations.
• Team capabilities: Can your team use the software effectively? Complex platforms may require extensive training or hiring specialist staff, while more user-friendly options reduce onboarding time.
• Budget constraints: Does the pricing fit your financial reality? Consider both subscription costs and implementation expenses.
• Integration needs: Does it connect with your existing business tools such as CRM, payment processors, or inventory management? Seamless integrations reduce manual work, minimize errors and improve operational efficiency.

Conclusion

Xero’s new 2025 prices mean higher monthly costs for many, but also more features included as standard. For most businesses, the time saved by automation and the new built‑in payroll help reduce these costs.

Choosing the right plan and only paying for features and users you need keeps Xero cost‑effective. With its strong support and easy setup, Xero remains one of the best choices for Australian businesses wanting simple, efficient accounting software.

Simplify your accounting with Outbooks Australia, Expert Xero bookkeeping services and solutions personalised for your business success.

For expert support, contact Outbooks Australia at info@outbooks.com.au or call 0451 320 102

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