If you’re a small business owner using Xero, you may remember the shake-up to plan structures last year. While the intention was to simplify the lineup, many users—especially those with just a few employees or who simply needed to pay themselves—found the changes a bit restrictive.

Xero has listened and In response to customer feedback, payroll is making a comeback to Xero Ignite and Xero Grow plans, with a few other updates designed to make payroll processing easier and more flexible for smaller businesses.

What’s Changing?

Here’s what you can expect soon:

• Xero Ignite will include payroll for one employee (just like the previous Xero Starter plan).

• Xero Grow will include payroll for two employees (similar to the old Xero Standard).

• Automated superannuation payments will also be available on both plans.

These updates are designed to give small businesses more room to manage payroll without needing to move up to higher-tier plans.

Who Is This For?

This is great news for:

• Sole traders or business owners paying themselves through payroll

• Small teams with one or two employees

• Businesses that previously had to pay more than necessary just to access basic payroll features

If you were using Xero before July 2024 and have already moved to Ignite or Grow, you don’t need to do anything—these features will be added automatically once live.

If you’re still on older plans and are due to switch by July 2025, the current timing stays in place. However, once these payroll updates go live, you’ll have the option to switch earlier if the new Ignite or Grow plans are a better fit.

Why It Matters

Managing payroll and super obligations is a big part of staying compliant as an employer. With these changes, Xero is giving small business owners the tools they need—without pushing them into higher-priced plans they may not need.

It’s a step in the right direction, and a welcome one for many in the small business community.

If you’re unsure about which plan is right for you or how these changes affect your current setup, our team at MKG Partners is here to help. We can review your current Xero plan, help you transition smoothly, and ensure your payroll and compliance processes are all up to speed.