2018 Review of Xero Payroll

Xero is an online accounting application designed for small to mid-sized businesses, offering complete accounting and payroll functionality in an easy-to-use application. Xero also offers Xero HQ, which is designed for accountants and bookkeepers that wish to offer payroll and accounting services to their clients. Along with Xero’s Software as a Service model, Xero also offers a mobile app, so users can access the application using any smart phone, tablet, or other device.

Xero Payroll can handle payroll for up to 100 employees, and offers a variety of payroll features including the ability to process multiple pay rates, a flexible payroll calendar, the ability to track and manage employee leave and flexible pricing, dependent on the number of employees paid.

Xero offers easy access to all companies and clients through the My Xero menu. Clicking on Search Your Organizations displays a list of all organizations that payroll will be processed for. Users can conveniently manage all clients from a central dashboard, bringing up the appropriate client and accessing the related payroll functions. Xero handles multiple pay types including earnings, benefits, deductions, reimbursements, and time off. Users can set up a pay template for each employee that is being paid, with users able to add or delete items from the template at any time.

Xero Payroll is currently available in 36 states, including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming. Though taxes are calculated in any state that Xero is available in, electronic filing and tax remittance is only available in California, Florida, Illinois, New Jersey, New York, Pennsylvania, Texas, Utah, and Virginia.

Xero offers solid payroll reporting options, with a wide variety of payroll related reports available, including Employee Reports, Time Off Reports, Payroll Reports, Pay History Reports, Pay Item Reports, and Timesheet Reports. Various group and filtering options are available for all Xero reports, and users can also export reports to Microsoft Excel or save any report as a PDF.

Xero easily handles all required payroll reports including all federal tax forms 940, 941, 944 and both federal employment and unemployment tax reports. State payroll reports are also processed in Xero, though electronic filing is limited, as noted earlier. Xero also offers integration with a variety of time-tracking apps including Harvest, TSheets, WorkflowMax, TimeTracker, Timecamp, Freshdesk, and numerous others.

A completely integrated accounting application, Xero offers complete accounting and payroll functionality as well as integration with over 500 apps that address a variety of functions including Inventory, CRM, Payments, Point of Sale, eCommerce, Practice Management, Financial Services, and others. The product also integrates with a variety of outside Payroll and Human Resources applications including Gusto, ADP, Zenefits, SurePayroll, and Wagepoint.

Xero also includes a client/employee portal, so clients and employees have anytime access to payroll features. Accountants and administrators grant access levels, providing clients with the ability to log in and enter payroll hours and other data, with that same option provided to employees as well. Payroll related data such as paystubs and W-s’s can also be accessed from the portal as well.     

Xero offers excellent help and support options, including a variety of short videos that are located throughout the robust Help Center. Also available is the User Guide, which provides detailed instructions on everything from creating a chart of accounts to setting up payroll. Users can also enter a search term to display a variety of options available. A variety of training courses are also available through Xero U, and users also are provided with free, unlimited support with their paid subscription.

Xero is an excellent option for small business owners as well as accounting professionals that currently use or plan to use Xero to offer accounting and payroll services to their clients. Xero is available in three versions; the Starter version which is best for freelancers and is $9.00 per month; the Standard version, which is good for smaller businesses and runs $30.00 per month, and the Premium version, which is $70.00 per month and can handle payroll for up to 100 employees (per company). Xero also offers a free 30-day trial for those that wish to try out the product.

2018 Overall Rating – 4.75 Stars