Xero Payroll: A Comprehensive Look at Its Pros, Cons, and Top Alternatives

Xero Payroll enables businesses to manage salary payments and maintain accurate payroll records effortlessly. It provides essential tools to streamline wage processing, calculate deductions, and efficiently organize employee information.

However, because Xero Payroll depends on third-party integrations for specific functions, some companies may find it lacking in critical areas. Limitations in payroll tracking, built-in compliance, and dedicated support can pose challenges for businesses that require a more comprehensive payroll solution.

So, is Xero Payroll the right fit for your business needs? In this review, we’ll explore how this accounting software doubles as a payroll system, highlighting its key strengths, drawbacks, and core features. By the end, you’ll have a clearer understanding of whether Xero Payroll meets your requirements or if an alternative might serve you better.

What is Xero Payroll?

Xero Payroll is an accounting platform designed to help small businesses handle routine payroll tasks and maintain accurate employee information. It simplifies salary calculations, deduction management, and secure storage of payroll data.

For companies that require more advanced payroll capabilities, Xero integrates smoothly with various third-party payroll applications, offering greater flexibility.

With Xero, all employee pay records, personal details, and banking information are stored in a centralized location, making salary reconciliation straightforward. Users can easily duplicate previous pay runs, make necessary adjustments, and automatically distribute payslips as needed.

Additionally, Xero Payroll comes with project management tools that are especially beneficial for service-oriented contractors managing multiple clients and projects. These features help businesses stay organized and manage their finances more effectively.

Valuable Features of Xero Software

Xero’s main dashboard is designed to be clean and well-structured, with the primary navigation menu located at the top of the screen. The interface features a blue and white color palette, paired with clear.

Once logged in, users are greeted with a snapshot of their business’s financial health, displaying bank balances, pending invoices, cash flow summaries, and upcoming bills.

These quick overviews provide valuable insights at a glance, enabling users to stay on top of their finances effortlessly. And then, Xero Payroll also offers these features:

• Recurring payroll processing: Run regular payroll cycles for a small team directly within Xero’s accounting platform.
• Secure employee records: Store employee information, payroll history, and banking details safely in the cloud.
• Payroll reconciliation: Effortlessly match salary payments with your financial transactions.
• Payslip distribution: Generate, email, or print employee payslips directly from Xero.
• Flexible payroll runs: Input employee hours, pay rates, taxes, and deductions manually, or duplicate and adjust a previous payroll run as needed.
• Integration with payroll apps: Extend functionality by connecting Xero with third-party payroll solutions available in the Xero App Store.
• Smooth data synchronization: Automatically sync employee information and payment data with integrated payroll applications.

Pros and Cons of Xero Payroll Software

Xero payroll software provides helpful tools for managing employee pay, but it might not meet the needs of every business. Here are its main strengths and weaknesses to help you make an informed decision.

Pros of Xero Software

Xero streamlines salary and deduction management, reducing the need for manual tasks. Here are some of its standout strengths:

• User-friendly general ledger: Xero simplifies account setup with a pop-up customization window that saves time and steps. It also offers advanced capabilities, such as detailed tax configurations and auto-reversing dates, similar to what you’d find in enterprise-grade systems.
• Organized dashboard: The main dashboard presents essential financial information such as bank balances, invoices, and cash flow in a single, easy-to-navigate view
• Intuitive mobile app: The Xero Accounting app lets users send invoices, monitor bills, and manage contacts on the go. It also supports secure biometric login for added protection.
• Effortless invoicing and bill payments: Users can create and send invoices, as well as handle payments, directly within Xero, without needing to switch tools. Outstanding bills can also be consolidated into a single invoice with just one click.

Cons of Xero Software

Although Xero offers several benefits, there are some limitations to keep in mind:

• Outdated interface on specific pages: While the main dashboard is modern and user-friendly, some sections like the Chart of Accounts, appear outdated and lack design consistency. This can hinder smooth navigation, particularly for accountants who rely on it regularly.
• Limited time tracking for payroll: Time tracking within Xero is available only for project management purposes, not for payroll. Businesses must either rely on third-party apps or manually input employee work hours using Xero Me.
• Lack of internal team communication: Although Xero supports contact management for customers and suppliers, it lacks an internal messaging feature for team collaboration.
• Support is limited to online portals: Xero does not provide phone or live chat support. Instead, users must access help through a support portal, which is often buried within help articles. As a result, many users turn to online searches for assistance.

HashMicro as the Alternative for Xero Payroll

Xero is a solid option for managing accounting and payroll, particularly for businesses seeking a simple, reliable way to stay on top of their finances. However, it may fall short for companies looking for a fully integrated system.

Because payroll is often closely tied to HR, many businesses find themselves switching between multiple platforms to manage both functions.

For HR managers and business owners seeking a more comprehensive payroll and HR solution, HashMicro payroll software provides a streamlined approach. But it’s capable of so much more, such as:

• Automated late deduction calculation: Automatically deducts salary for tardiness based on attendance records.
• Configurable overtime and meal allowance processing: Calculates and processes overtime pay and meal allowances based on company policies.
• Comprehensive leave management: Supports leave encashment, unpaid leave, carryover balances, and monthly, annual, or anniversary-based leave policies.

Conclusion

Xero Payroll delivers essential tools for handling basic payroll and accounting tasks, making it suitable for small businesses with straightforward needs. However, for companies in Malaysia that require a more unified payroll and HR system, Xero may not provide all the necessary features.

HashMicro payroll software is built to support Malaysian businesses with localized compliance, automated processes, and integrated HR functions.

If you’re looking to streamline your operations with a more complete solution, request a free demo today to see how HashMicro can support your growth.

FAQ Xero Payroll

• How does Xero payroll work?

  Xero Payroll works by allowing businesses to manage employee pay, taxes, and leave directly within the Xero accounting platform. You can set up employee profiles, automate pay runs, calculate taxes and superannuation, and file reports with tax authorities. It also includes employee self-service features for submitting timesheets and leave requests.

• How much is Xero payroll per month?
  

  Xero Payroll starts at around AUD 70/month in Australia and £33/month in the UK, with higher plans available for more employees.

• Is Xero payroll any good?

  Xero Payroll is a reliable, easy-to-use solution that works well for small to medium businesses, especially when integrated with Xero accounting.