How Much Does Xero Cost

Xero is a cloud-based accounting software platform that has become a leading choice for small and medium-sized businesses in the UK. It is known for its clean interface, real-time bank feeds, invoicing tools, and strong support for VAT and Making Tax Digital (MTD). But before committing to Xero, one of the most important questions for any business owner is: how much does it cost?

The answer depends on the size and needs of your business, as Xero offers different pricing plans with features that scale depending on your requirements. This article breaks down the current Xero pricing in the UK, what you get with each plan, and whether the cost justifies the value for your business.

Xero pricing plans in the UK

As of 2024, Xero offers three main subscription plans: Starter, Standard and Premium. Each plan includes core features such as invoicing, expense tracking, and bank reconciliation, with some variations in volume and functionality.

Starter – £15/month (excluding VAT)
The Starter plan is aimed at sole traders, freelancers and new businesses. It includes the ability to send quotes and up to 20 invoices per month, reconcile bank transactions, and submit VAT returns to HMRC. However, this plan has limits on how many bills you can enter, which makes it less suitable for businesses with a high volume of suppliers.

Standard – £30/month
This plan removes the restrictions on invoices and bills, allowing for unlimited transactions. It is suitable for most small businesses that need full functionality. You also get the ability to manage cash flow, track VAT, and connect to payroll. However, multi-currency support is not included in this tier.

Premium – £42/month
The Premium plan includes all the features of the Standard plan and adds support for multi-currency accounting. This is important for businesses dealing with overseas suppliers or customers. The Premium plan is commonly used by importers, exporters or e-commerce businesses with an international presence.

Prices are exclusive of VAT and may be subject to change. Xero frequently offers discounts to new customers, such as 50 percent off for the first four months or free trials for 30 days.

Optional add-ons and extras

Xero offers several optional services that are not included in the standard plans.

Payroll
Xero Payroll is available as an add-on starting at £5 per month for up to five employees, with an additional cost per extra employee. It includes RTI submissions, auto-enrolment support and payslip generation.

Xero Projects
This is a job costing and time tracking add-on for businesses that want to monitor profitability on a per-project basis. It starts at £5 per month per user.

Xero Expenses
Designed to streamline employee expense claims, this feature includes mobile receipt capture and mileage tracking. Pricing starts at £2.50 per user per month.

CIS support
Construction Industry Scheme reporting is available as part of Xero Payroll, but it requires activation and configuration for contractors or subcontractors operating under the scheme.

These add-ons give flexibility but also increase the total monthly cost, so businesses should factor them in when budgeting.

Is Xero worth the cost?

For most small to medium-sized businesses, Xero offers strong value for money. The interface is intuitive, the mobile app is excellent and the automation of bookkeeping tasks such as bank feeds, rules and reconciliations can save several hours a month. These time savings alone often justify the monthly cost.

Xero’s real strength lies in its ecosystem. It integrates with over 1,000 third-party apps, including payment processors, CRM systems, inventory platforms and e-commerce tools. This makes it a good choice for businesses looking to build a connected tech stack.

However, businesses with very simple accounting needs, such as a part-time sole trader, may find the cost high compared to cheaper alternatives or even spreadsheets. On the other end of the scale, growing businesses will appreciate Xero’s ability to scale, especially if paired with an accountant or bookkeeper familiar with the platform.

Final thoughts

Xero’s pricing in the UK ranges from £15 to £42 per month, with optional add-ons depending on your payroll, project tracking or expense management needs. While not the cheapest solution available, its ease of use, depth of features and scalability make it a solid choice for many businesses.

Before subscribing, take advantage of Xero’s free trial and test the features that matter most to your business. Consider your transaction volume, need for multi-currency, and whether you require payroll or project costing. If used properly, Xero can be more than just a cost — it can be a time-saving tool that improves your decision-making and helps your business stay compliant and financially healthy.