May 1, 2024

Xero 2024 Pricing Changes and Plan Changes

Jeremy Wotton

Xero, in their infinite wisdom, have recently announced that there are further increases coming to their pricing. You may have recently received an email or other communication from Xero directly about these changes.

From 1 July 2024, (hey, at least they aren’t picking a ridiculous date this year) the cost of Xero Business plans will increase in Australia.

At the same time (that is, 1 July 2024), Xero are also making changes to its plan offerings (and names). The following plans will no longer be available to new users from 1 July 2024:

  • Payroll Only
  • Payroll Cashbook
  • GST Cashbook
  • Starter
  • Standard
  • Premium Plans (that is)
    • Premium 5
    • Premium 10
    • Premium 20
    • Premium 50
    • Premium 100

If you are currently on one of the above plans, Xero will move you to their new plans in phases, depending upon what side of the bed the CEO wakes up on in the morning. Xero has not released any indicative timing or schedule about when you will be forced to move to their new plans.

This forced move will begin with current Premium 10 – 100 subscribers – you will be moved to the equivalent tier Ultimate Plan (with Ultimate Pricing) on 1 July 2024.

Xero intends to move all subscribers to the new plans by March 2025.

Xero’s New Plan Offerings will be at the following Subscription levels:

  • Cashbook
  • Ignite
  • Grow
  • Comprehensive
  • Ultimate 10
  • Ultimate 20
  • Ultimate 50
  • Ultimate 100

Full details of Xero’s new Pricing Plans, and their features are included in the image below.

Some of these changes are grossly unfair. Currently, if a business owner wanted to pay themselves from their small business, they could subscribe to Xero’s Starter Plan, which provides payroll access for 1 employee, at a subscription cost of $32 per month. From 1 July 2024, the owner would need to move to Xero’s new “Grow” Plan, at a subscription cost of $70 per month – an increase of 118.75%.

Paying yourself and one other? Right now you can use Xero’s Standard Subscription for $65 per month. From 1 July, you’ll need to use Xero’s new “Comprehensive” Plan, at a subscription cost of $90 per month – an increase of 38.46%.

It gets worse.

From 1 July 2024, Xero will also stop you from adding “add-ons”, such as Xero Projects, onto your Xero file. Instead, if you wanted to use these add-ons, you must upgrade your subscription plan to a level that includes your chosen add-on. By way of an example, a small business owner currently has a Standard Xero subscription, but utilises Xero Projects for workflow and job management and invoicing. Their current monthly subscription cost for Xero is $75. From 1 July 2024, this small business owner would need to subscribe to Xero’s Ultimate 10 plan, at a cost of $115 per month.

If you don’t win the lucky door prize and get moved to one of Xero’s new plans on 1 July, Xero is increasing the price of your subscription anyway before you get moved to a different plan to pay even more. From 1 July 2024:

  • Xero’s Payroll Only will increase by $5 per month to $20 per month
  • Starter will increase by $3 per month to $35 per month
  • Standard will increase by $5 per month to $70 per month
  • Premium 5 will increase by $5 per month to $90 per month
  • Premium 10 will be unavailable. You will be moved to Xero’s Ultimate 10 plan. Your subscription will increase by $16 per month to $115 per month
  • Premium 20 will be unavailable. You will be moved to Xero’s Ultimate 20 plan. Your subscription will increase by $20 per month to $145 per month
  • Premium 50 will be unavailable. You will be moved to Xero’s Ultimate 50 plan. Your subscription will increase by $30 per month to $200 per month
  • Premium 100 will be unavailable. You will be moved to Xero’s Ultimate 100 plan. Your subscription will increase by $40 per month to $245 per month
  • Ultimate 10 will remain unchanged at $115 per month
  • Ultimate 20 will increase by $10 per month to $145 per month
  • Ultimate 50 will increase by $20 per month to $200 per month
  • Ultimate 100 will increase by $30 per month to $245 per month

If you use Xero’s Non-GST Cashbook, GST Cashbook or Payroll Cashbook plans, your most recent Xero subscription price rise was in March – two months ago. From 1 July 2024:

  • Non-GST Cashbook will become Cashbook. There should be no change to your monthly subscription
  • GST Cashbook will be unavailable. You will be moved to either Ignite at $35 per month or Grow at $70 per month
  • Payroll Cashbook will be unavailable. You will be moved to Comprehensive at $90 per month

If you are on Xero’s Payroll Only plan, our strong recommendation is to move away from Xero, as they are no longer offering a low-cost STP compliant payroll product. We’ll be in touch with you about this with more detail, but recommend you search the ATO’s Software Product Register here – https://softwaredevelopers.ato.gov.au/product-register#Functionality=*Payroll%20(STP)

If you have a current Xero discount or promo code, it will be applied to the new pricing from 1 July 2024, and continue until the discount or code expires.

Due to the timing of the change, whether if you hold your Xero subscriptions directly, (that is, you pay Xero for your subscription), or whether we hold your Xero subscription, Xero’s pricing changes will take effect from 1 July 2024.

For more information about the upcoming price changes, please visit Xero’s website here – https://www.xero.com/au/pricing-plans/update/, or their puff-filled marketing page here: https://www.xero.com/au/campaign/new-plans/.

If you’d like to check which Xero subscription level you are on, or if you have any questions, please don’t hesitate to get in touch.

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