Xero integrates payroll for Aussie businesses

Cloud accounting software vendor Xero has begun offering integrated payroll to Australian customers for the first time.

The updated solution provides many of the features offered by Paycycle, which Xero acquired in July last year, but would allow existing customers of both products to use the same login credentials.

Xero chief executive Chris Ridd said integration work for the acquisition meant rewriting the Paycycle software, which was coded in Microsoft Silverlight, to HTML5.

The integrated payroll feature will be provided at no additional cost to Xero customers.

Ridd said the payroll feature was driven by a desire in the Australian small business market - accounting for approximately 820,000 companies with less than 200 employees - to have an integrated payroll and accounting product.

Competing standalone accounting software from rivals such as MYOB have payroll integration already.

Planned upgrades for the payroll solution, including report packs for accountants and purchase orders, will be rolled out to users over the coming weeks.

Price differentiation

Australian use of the software has sky-rocketed, with the local user base doubling in the last financial year to more than 16,000 customers, making up approximately a fifth of the company's 78,000-strong user base globally.

The country also accounts for approximately a quarter of Xero's reported NZ$19.3 million (AU$14.9 million) in revenues for the year ending March 31.

Despite claims the company was listening to its users, Australian users continue to pay the most for Xero products when compared to equivalent pricing in the US, UK and New Zealand.

Where Australian users pay $64 per month for the top-tier option, New Zealanders pay AU$56.91, US users pay AU$39.84 and those in the UK are offered the same solution for $46.12, including sales tax.

Ridd said price differences between countries for Xero came down to differing regulations in each country, requiring unique functions and features. He told iTnews that Xero “hasn’t moved on price since 2008”.