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Top 3 Best Xero Payroll Alternatives in Australia

Payroll Leadership Institute of Australia

Xero Payroll has long been a popular choice for businesses managing payroll, especially among small and medium-sized enterprises (SMEs). However, recent changes in pricing and plan availability are prompting many business owners to look for alternatives. As of July 2024, Xero's Payroll-Only plan will no longer be available, and the comparable plan costs a significant amount more, forcing many to reconsider their options. The Payroll Institute of Australia (PLIA) explores the top three alternatives to Xero Payroll, focusing on platforms that offer similar or enhanced features at a potentially lower cost.

2. Why Consider Alternatives to Xero Payroll?

Example Scenario:

Imagine you’re a small business owner in Australia running a family business with one or two employees. You need to manage payroll and report Single Touch Payroll (STP) to the Australian Taxation Office (ATO). Up until now, you could have been using Xero’s Payroll-Only plan at $15 per month, which supported up to four employees. However, Xero is discontinuing this plan in July 2024, forcing users to upgrade to more expensive options like the Comprehensive Plan, which costs $90 per month—a sixfold increase.

PLIA’s primary concern is that the price increase could drive small businesses away from established providers like Xero in search of more affordable solutions. The organisation emphasises the importance of maintaining a competitive market for payroll services that cater to the needs of small businesses without compromising on quality or compliance.

Common Issues with Xero Payroll:

  • High Pricing: Significant cost increase for micro-businesses and startups.
  • Limited Advanced Features: Lacks some of the more sophisticated payroll management features found in competitors.
  • Integration Challenges: Difficulties in integrating with certain tools or business software.

Benefits of Exploring Alternatives:

  • Cost Savings: Alternatives can provide significant savings and tailored solutions for smaller operations.
  • Enhanced Usability: Many alternatives offer more intuitive and user-friendly interfaces.
  • Better Support and Local Features: Australian-focused solutions often provide superior support and compliance features.

3. Criteria for Selecting the Best Payroll Alternatives

When choosing a payroll alternative, consider the following factors:

  • Ease of Use: The platform should be straightforward for day-to-day payroll management.
  • Pricing: Plans should be affordable and flexible, especially for small businesses.
  • STP Compliance: Ensure the platform can report STP directly to the ATO.
  • Features: Look for automated tax calculations, employee self-service, and direct deposit capabilities.
  • Integration: Compatibility with other accounting and business tools is key.
  • Customer Support: High-quality support and accessible resources are essential.

4. Top 3 Alternatives to Xero Payroll

As Xero increases its fees, PIA highlights the availability of alternative payroll solutions that may offer better value for money. 

#1. ClockOn ↗️

Overview: ClockOn is an Australian-made payroll and workforce management solution tailored for small businesses. It provides a comprehensive suite of payroll services that are perfect for SMEs.

Key Features:

  • STP compliance with direct ATO reporting.
  • Employee scheduling, time and attendance tracking.
  • Flexible payroll options suited to various business sizes.

Pricing: ClockOn offers affordable pricing plans designed specifically for small businesses, making it a cost-effective alternative to Xero.

Trial it for free for up to 12 months, or upgrade to the Standard plan from $135/year

Pros:

  • Intuitive interface ideal for small teams.
  • Focus on Australian businesses with local compliance features.
  • Pay-as-you-go pricing, offering better control over costs.

Cons:

  • Limited integrations compared to larger, more established software.
  • May lack advanced HR features found in more comprehensive platforms.

Best For: Small Australian businesses seeking an affordable, straightforward payroll solution.

4.2. ELMO Software ↗️

Overview: ELMO Software is a cloud-based platform offering a robust HR, payroll, and rostering solution for small to medium-sized businesses. It provides a full suite of services that extend beyond basic payroll needs.

Key Features:

  • Full-service payroll processing with STP compliance.
  • Employee onboarding, rostering, and time management tools.
  • Advanced reporting and analytics capabilities.

Pricing: ELMO Software provides flexible pricing options tailored to business needs, often at a lower cost than Xero’s new plans.

Pros:

  • Comprehensive HR and payroll features.
  • Strong compliance support with a focus on Australian legislation.
  • Modular approach allowing businesses to pay only for needed features.

Cons:

  • Can be overwhelming for businesses seeking only basic payroll services.
  • Pricing may vary based on selected modules, leading to potential cost fluctuations.

Best For: Small to medium-sized businesses needing an all-in-one HR and payroll solution.

4.3. Reckon ↗️

Overview: Reckon is a well-established Australian software provider offering a reliable and affordable payroll solution that integrates seamlessly with its accounting products.

Key Features:

  • Easy STP compliance and ATO reporting.
  • Integrated accounting, payroll, and invoicing tools.
  • Customizable reports and employee self-service portals.

Pricing: Reckon’s pricing is competitive and often lower than Xero’s revised plans, making it attractive for small businesses.

Pros:

  • Simple setup with strong integration capabilities.
  • Localized support with a focus on Australian businesses.
  • Affordable for smaller businesses and startups.

Cons:

  • The user interface may not be as modern as other platforms.
  • Limited HR functionalities compared to more expansive solutions like ELMO.

Best For: Small businesses needing a cost-effective payroll solution with robust accounting integration.

Making the Switch

Switching from Xero Payroll can be a smooth and manageable transition for businesses seeking cost-effective alternatives. Solutions like ClockOn, ELMO Software, and Reckon provide reliable, compliant, and user-friendly payroll options tailored to the needs of Australian businesses. Each platform offers distinct advantages, with ClockOn known for its simplicity and affordability, ELMO Software recognized for its comprehensive feature set, and Reckon praised for its seamless integration with accounting services. These alternatives ensure that businesses can maintain efficient payroll management without compromising on quality or compliance.


Key Facts:

  • Xero’s Payroll Only Plan Price Increase: Xero is bundling the Payroll Only option into its Comprehensive Plan, which costs $90 per month—a sixfold increase on the existing payroll plan's pricing.

  • Impact on Small Businesses: The PLIA expressed concern that this price increase could add a financial burden to small businesses already facing economic challenges. They urge businesses to evaluate whether the increased costs align with their needs.

  • Alternative Solutions Available: PLIA highlighted affordable alternatives to Xero, such as ClockOn, ELMO and Reckon. 


Contact details:

Payroll Leadership Institute of Australia

info@plia.au

www.plia.au

 

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