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US Payroll - Per Employee Xero Pricing (not the ridiculous alternative)

Started by MIKE BLOCK CPA -   in Feature Requests | Not planned

We badly need per employee Xero pricing.

Every other payroll company I have ever known charged based on employees or transactions. Xero prices are now LIKE A like a STOPPED CLOCK, which is ONLY RIGHT TWICE A DAY.

The $30 one employee plan seems inexpensive, especially now that Xero says it will cover up to five employees. However, it is likely to be ridiculously costly, because it does not include direct deposit, e-file and e-pay options. Any payroll service without this is UNPROFESSIONAL AND IRRESPONSIBLE, not only due to the time wasted, but due to the federal and state tax notices and penalties that will surely result. It will ESPECIALLY HURT THE CPAs AND CHARTERED ACCOUNTANTS XERO WANTS MOST. My initial solution was to sign up many one and two employee clients at the $39 introductory rate, for the 10 employee plan. However, you could only do that until 12/8/13, as it then became $70 a month. $40 a month for e-services, for one employee, is RIDICULOUS! We MUST either have E-SERVICES IN ALL PLANS OR APPROPRIATELY PRICED SEPARATELY!

Yes, in this case ALL CAPS means I am really YELLING!

10 employees for $70, 20 employees for $90 and 100 employees for $180 seem reasonable, especially with the 25% discount I give even non-clients. However, the number of employees per month is often variable. The XERO STOPPED CLOCK PRICES make 11 employees for $90 and 21 employees for $180 EQUALLY RIDICULOUS!

The very good Zen Payroll add on is $29 for one employee, $57 for 11 employees and $77 for 21 employees. The corresponding price for the AccountantsWorld payroll, which we can easily integrate, would be under $20, regardless of the number of employees.

XERO IS NOW HURTING ALL SMALL USERS AND PROFESSIONAL ACCOUNTANTS, by making us either CURSE XERO for wasted time, tax notices and penalties OR EXCESSIVE FEES. WE CANNOT START ANY NEW CLIENT OR RENEW EXISTING CLIENTS AT CURRENT XERO RATES, even though Xero seems to have the best payroll program. Most companies start payroll on January 1, so fast action is essential. It is also essential because no one should now enroll any new clients (or renew existing clients) in Xero payroll.

PLEASE VOTE for Per Employee Xero Pricing (not the RIDICULOUS ALTERNATIVE) to change this quickly and share using http://bit.ly/1evmS4u
I agree. With our current cloud payroll system we pay per employee across all our clients. Payroll from xero won't be here in the UK for a while but you have my vote.
 

Stephen Quay  

Thank you very much Stephen. I promise to give you my vote at every opportunity.
 

MIKE BLOCK CPA  

@Mike, I was a bit indifferent to this topic until I stopped to think about it. Al the payroll processors I am aware of either charge per employee, or by a small group (1-5, 6-10, etc.). My payroll processor charges by the payrun with a base charge, depending on whether it's weekly, etc., then a small upcharge for every employee over 10. I now agree that Xero should change it's pricing. I think inm the long run, as well as the short run, this will cost a lot of business for us all.
 

David Goldstein  

@David I also was indifferent until I thought about it. The current system will certainly cost us lots of business. It will make me take every new, upgrading and renewing client off Xero payroll. This could make many drop Xero or me entirely.
 

MIKE BLOCK CPA  

@Mike, I really hope that Xero is watching and listening. Not sure why they devised their way of pricing payroll, but it will cost them dearly. Just wait until you hear the complaints after the one year @$39.00/mo going to whatever...it will be a very loud sound.
 

David Goldstein  

I cannot edit my original Feature Request, but we need separate charges for all types of features and entries, not simply payroll.
 

MIKE BLOCK CPA  

I added my vote, because it *is* an important feature. Also, I mentioned it, as did others, during the Xero U.S. Roadshow. As Xero's rolling out the payroll feature in bundles of states, I decided it was best to continue processing payroll as I currently do.

And, I'm neither a CPA nor a CA, but I believe that bookkeepers are also going to feel the limitations of the Xero payroll offering, in its current state.

I believe Mike's feedback/constructive criticism is going to better inform the Xero developers, as they work to identify & resolve issues raised. Let's hope for more votes!
 

Paula Small  

@Paula, I agree with everything you said. And, of course, I voted as well.
 

David Goldstein  

Thank you to all who voted. We are moving this rather quickly. Now we each need to find (10?) friends to vote.
 

MIKE BLOCK CPA  

I am both a QB ProAdvisor and a Xero Certified Advisor. I recently switched to Xero for my own company's accounting. I guess I don't understand why Xero is only charging $29 for the monthly business subscription, yet over twice as much for payroll. Seem kind of counter-productive in getting people to switch. I have a hard time believing that there is that much incremental cost per employee that would justify such high prices.
 

Dennis Thompson  

@ Dennis: YES! That is exactly what I meant when I said that Xero prices were like a stopped clock (only right twice a day). Hit a sweet spot and Xero beats all competitors. Otherwise, the incremental cost of one entry, employee, e-service or multi-currency ridiculous. Since no one can have exactly the bracketed number of items, month after month, the desire for simplicity is making Xero and its Advisors completely non-competitive 99% of the time.

It is especially crazy because Xero has done such a terrific job with add-ons, by helping us get exactly what we want. However, it now refuses to treat each of its own features and entries as an itemized add-on.

DID YOU VOTE?
 

MIKE BLOCK CPA  

Mike,

Yes, I did vote for your petition. BTW, I enjoy your posts on Twitter regarding the pros and cons of Xero vs QB and QBO. I like QB, but I believe that Intuit as a company is handicapped by having to divide their attention between the past (QB Legacy Desktop Users) and the future ( the Cloud) whereas Xero is more tightly focused on the future. Seems like it is kind of hard to do both.
 

Dennis Thompson  

@Dennis Yes, Intuit is handicapped by having to divide their attention between the desktop and the cloud. The excellent, but now dated. Inside Intuit book makes it very clear that Intuit repeatedly beat Microsoft because everyone focused on computer personal financial services. They are trying to deal with the web - desktop split by allocating 75% of development money to the web. Due to Intuit's size, that should leave both areas with far more development money than Xero. However, Intuit never spent as big a percentage of revenue on development as Xero spent. It also is now spending ridiculous amounts on insider stock buybacks. Therefore, Xero is still adding much more much faster.

Intuit also has taken major steps to copy very successful Xero approaches. For example, QB dropped most add-on developer fees (they were the larger of $1,000 or 20% of sales/months) and its proprietary add-on interface, in favor or an open RESTful interface. They also said they would provide a free workflow tracker, but are charging $99 a month for a Fifoworkpapers product you can still get free. Most significant, for most QB Online users, all bank and credit card downloads are now automatic, with good account assignment logic. Unfortunately, QBO is still very slow. QB desktop now uses one button to download for all accounts, which is better than nothing.

None of this, however, can make up for the many ways that Intuit is still disregarding and substantially damaging professional accountants, in old and new ways. Therefore, Xer4o still has its way clear for massive sales increases.
 

MIKE BLOCK CPA  

It has always been apparent to me that Intuit has spent a great deal of their resources brilliantly to market its products, leading to the substantial market share they enjoy. The downside is that Intuit has spent so little over the years in making what they have function better, and egregiously underspending in development. What QB musers are left with is a PC-based dated accounting system, and an online application built upon its existing foundation, and not create an app specifically for the web. That leaves users with a slow, clunky product Intuit should be ashamed of. I know that QB ProAdvisors have to defend where their income comes from, but the truth as I see it, is that most good QB ProAdvisors spend their time with clients cleaning up QB messes.
 

David Goldstein  

@David
Marketing came first at Intuit and still ranks too high in spending. However, Insider bailouts have been coming first in recent years. Cumulative stock buy backs (Treasury stock) were $4 billion on the fiscal 2012 balance sheet. This exceeded company lifetime cumulative Retained Earnings. It also almost matched insider stock sales in the last four years. Insiders only bought discounted option stock (which they sell quickly).

Intuit is now planning $3.7 billion in extra stock buybacks. That is more than 2012 fiscal book value after the 2013 loss on discontinued operations, so it is not just their marketing emphasis that is letting Xero win.
 

MIKE BLOCK CPA  

Well said and voted
 

Doug Fehring  

Merged: US Payroll: Pricing

I would love to see a "per employee step charge" between the Standard Plan and the Premium 10 plan. I have many clients with 2-5 employees who have/will balk at $40/month for just a couple of employees.
 

Tom Limroth  

Upvoted, we started doing payroll in-house this year and it's a minor nightmare, but we can't justify working within Xero's fee structure. Per-employee, or even better, per-run (we pay at irregular intervals) would be a no-brainer for us.
 

Jon McGuire  

Here is my vote. C'mon Xero!
 

Jess Duarte  

Thanks Jess and everyone who voted. Please tell your friends about the need for many more Per Employee Xero (Payroll) Pricing votes before January 1, That is when the $39/month Xero Payroll cost disappear for initial payroll users.

The lowest price for a Xero e-file and e-pay payroll (if Xero ever delivers this) will then be $70 /month (up to 10 employees). Interestingly, my link shows Xero has now hidden the price for more than 10 employees, which was $140 a month.

I wasted an incredible amount of time by starting to install before the Xero payroll program or its support staff were really ready. I then pulled all my Xero payroll clients off payroll retroactively.The Xero billing adjustment took months, while showing Xero admitted payroll was not ready. Some clients dropped Xero and some dropped me due to this.

In my opinion, Xero payroll should still be a free beta program, because (to my knowledge) it has no U,S, e-file and e-pay. I cannot understand why anyone would use a U.S. payroll program without this. Some payroll add-ons have reasonably priced, full-featured payroll. Xen Payroll gets nothing but 5 star reviews. It is $25/month + $4 for the first 10 employees ($2 for additional employees). This will make Xen much cheaper than Xero, even if Xero gets e-file and pay, for a few employees:

,,,, 1 employee ($29 vs $40)($40 is the extra Xero payroll only cost: $70 - $30)
.... 3 employees ($37 vs $40)

However, Xero is cheaper for:
.... 4 employees ($41 vs $40)
.... 10 employees ($65 vs $40)

But (if the old Xero prices still apply), Xero is:
.... 11 employees ($67 vs $110)(this is $140 less $30)
.... 20 employees ($85 vs $110)

All this shows Xero prices are about like a stopped clock (right twice a day, depending on how many hours you have that day), This clearly shows the need for Per Employee Xero Payroll Prices.

(continued below)
 

MIKE BLOCK CPA  

If Xero had a plan to give us Per Employee Payroll Pricing, we should have heard by now. It instead made major changes in payroll and sales personnel.

Xero also apparently has no plan to give us bank or credit card balances after each entry, bank or credit card statements and the ability to view the detail of checks or deposits, for as far back as financial institutions allow. An add-on can do this and generate CSV files for Xero (and qbo files for QuickBooks).

Xero also has been hostile to my still free 0CPAs program, which lets you review, compare and correct Bank Rules in Excel. It also lets you import Bank Rules in Excel into any client.

I was once #3 in total U.S. Xero clients. However, all this made me stop adding Xero clients and move many back to QuickBooks, as Xero is not yet suitable for U.S. clients. Many should join my response.
 

MIKE BLOCK CPA  

Hi Mike,
I understand your frustration with the Xero US Payroll not-ready-for-primetime premature rollout, and the ensuing mess.

However, moving clients from Xero to QB seems to me a horrific thing to do to your clients. Xero is a great app, and QB is such a second class app. Xero should have done payroll differently, and should not get greedy in how they price out a full service payroll processing/deposit/e-filing service.

I have yet to recommend Xero for payroll, and will continue not to until they get it right, and get it reasonably priced. I had to move my own payroll, and several clients I work with from the payroll processor I was using, and chose Payroll Relief from AccountantsWorld, as it is tried and true, works only thorough accountants, and even with a modest markup for me, results in a great full service app far less expensive than ADP, Paychex, Zenpayroll, etc.

Either I or my clients have to do a quick and easy journal entry for each payroll into Xero, but it's a tiny price to pay for no-worry payroll.
 

David Goldstein  

Hi David: I did not say anything about QuickBooks Online (QBO), which is what I believe you are referring to when you say QuickBooks is a bad app. I have been calling QBO a very bad app, in direct CEO email and phone exchanges, since 2005 or before. I often say I would rather spend an hour getting drilled by a dentist than an hour using QBO.

I tried Accountant / Payroll Relief, with a California CPA, who dropped the ball when we tried automating. I still have many Xero clients, but returned others to "QuickBooks desktop." Most are online with my Amazon server, or effectively online (with all computer problems fixed remotely) for $20/month. My programs to let my very inexpensive international CPAs and Chartered Accountants convert bank statement to CSV files for Xero or qbo files for QuickBooks. A third program gets daily entries AND BALANCES for all banks and credit cards, without our having bank logins. It also gives monthly statements and lets us look at the details of checks (and soon, deposit slips), for as far back as banks allow (up to two years). It too outputs CSV files for Xero and qbo files for QuickBooks, so we can fill in gaps quickly and yell at both QB and Xero when they lose connections. The programs also use U.S. servers, so remote access by international people does not trigger security problems. Add some programs we wrote and we may soon not need Xero or QuickBooks for many clients.

(I would lie to say continued below, but Xero keeps saying it is having problems formatting my additional answer, even after I ran it through Notepad. Is this the beginning of censorship?)
 

MIKE BLOCK CPA  

Hi Mike,
Sorry, I was referring to QBO, but I also don't like QB Desktop, compared to Xero. Sorry yo had a bad experience with a Calif CPA and Payroll Relief. Setting up a client and employees is always, no matter the software, an exacting process. Once the setup is done properly, it's a very quick process. I have clients who do most of the input and payroll processing, but for most clients I do it, which is my preference. The client cost is very reasonable and if set up properly, it's quite automatic.

You and your firm are more highly technical than my little setup, but I do provide excellent and high-quality service, to small to large clients, and I really enjoy my work.





 

David Goldstein  

Mike, very occasionally a formatting error gets thrown up if there's a problem with links in a Community answer. If you redo your hyperlink(s) you'll be able to post the rest of your answer.
 

Brittany H (Community Manager)  

Merged: US Payroll Pricing

Strongly encourage Xero to consider a per employee pricing structure or, for example, a Premium 50 plan. It's rather onerous that a company with 21 employees has to pay $180/month while a company with 20 employees pays $90/month. The gap between Premium 10 and Premium 20 is more reasonable, but the gap to Premium 100 level is really problematic especially for companies with large numbers of part-time, fee-based, or hourly personnel that are increasingly being required to be treated as employees rather than 1099 contractors.
 

Guy Yarden