Xero vs Employment Hero — Australia 2026

Xero Payroll vs Employment Hero compared for AU businesses. STP Phase 2, Modern Awards, Payday Super readiness, HR features & pricing.

Last verified 2026-03-16

Quick Verdict

Employment Hero for payroll + HR; Xero for accounting-integrated payroll

Employment Hero scores 5/5 on Modern Award interpretation vs Xero's 4/5 and bundles HR features like onboarding, leave management, and employee self-service. Both are STP Phase 2 compliant and Payday Super ready. Xero Payroll is best if you want payroll inside your accounting platform with no extra app; Employment Hero wins if you need proper HR compliance alongside payroll.

Feature Comparison

Feature	Xero	Employment Hero
Headquarters	Wellington, NZ (AU operations in Melbourne)	Sydney, NSW
Entry Price	$35/mo	$20/mo
BAS Lodgement	Direct ATO lodgement via Standard Business Reporting — prepare, review, and lodge your BAS without leaving Xero. No need to log into the ATO portal or use a separate tax agent portal.	HR/Payroll platform — BAS via accounting integration (Xero, MYOB, QuickBooks)
STP Phase 2	compliant	compliant
Payday Super	ready	ready
Modern Awards	Supports common Modern Awards natively via Xero Payroll. Complex award interpretation (hospitality penalty rates, retail casual loadings) may require Employment Hero or KeyPay integration for full automation.	50+ pre-configured Modern Awards with auto-interpretation of penalty rates, overtime, allowances, and leave loading. Rates auto-update when Fair Work Commission publishes changes. Powered by KeyPay award engine.
Bank Feeds	Big 4 + 50+ banks	N/A
Data Hosting	AU	AU
AU Support Hours	24/7 online support	Mon-Fri 8am-6pm AEST
Phone Support	No	Yes
Integrations	1000+ apps	50+ apps

Pricing Comparison (AUD, Mar 2026)

Xero Plans

Ignite

$35/mo

AUD inc GST

✓Invoices: 20
✓Bills: 5
✓Bank Reconciliation: Yes

Employment Hero Plans

Lite

$20/mo

per employee

✓Employees: unlimited

AU Compliance Scores

How we scoreScores are out of 5 and reflect depth of compliance support, ease of setup, and ongoing reliability for Australian businesses. Assessed March 2026.

Xero

BAS Lodgement

5/5

STP Phase 2

5/5

Payday Super

5/5

Modern Awards

4/5

GST Handling

5/5

Bank Feeds

5/5

Employment Hero

BAS Lodgement

0/5

STP Phase 2

5/5

Payday Super

5/5

Modern Awards

5/5

GST Handling

0/5

Bank Feeds

0/5

Pros & Cons

Xero

Pros

Australia's most widely-used accounting platform — your accountant almost certainly knows it
Deepest bank feed coverage with 50+ AU banks including all Big 4 (CBA, NAB, Westpac, ANZ)
Direct BAS lodgement to ATO via Standard Business Reporting (SBR) — no need for the ATO portal
Largest app marketplace with 1,000+ integrations (Deputy, ServiceM8, Employment Hero, Shopify, etc.)
AU-hosted data on AWS Sydney with SOC 2 Type II and ISO 27001 certification
Payday Super ready for the July 2026 deadline with automatic super payments each pay run
Payroll now included in all plans at no extra cost (STP Phase 2 compliant)
24/7 online support with callback service

Cons

Most expensive of the major accounting platforms — Grow plan is $75/mo (was $52 before July 2025)
Ignite plan limited to 20 invoices and 5 bills per month, pushing most businesses to $75/mo Grow plan
No inbound phone support — callback service only, which may not suit everyone
Complex Modern Award interpretation (hospitality, retail penalty rates) requires third-party add-on like Employment Hero or KeyPay
Prices have increased significantly and repeatedly — Grow went from $52 to $75 in July 2025 alone
No annual billing discount — all plans are monthly billing only

Employment Hero

Pros

All-in-one HR + Payroll eliminates multiple subscriptions — onboarding, leave, rostering, payroll, and compliance in one platform
Best-in-class Modern Award auto-interpretation: 50+ pre-configured awards with automatic Fair Work rate updates (powered by KeyPay engine)
STP Phase 2 compliant (ATO-recognised since Sept 2022) and Payday Super ready via HeroClear real-time NPP payments
AU-made (Sydney, 2014), AU-hosted (AWS Sydney), SOC 2 Type II (Oct 2025) and ISO 27001 certified
Native integrations with Xero, MYOB, and QuickBooks Online — payroll journals sync automatically
Employee self-service app for payslips, leave requests, and personal detail updates — reduces HR admin
Digital onboarding with paperless contracts, TFN declarations, and super choice forms
300,000+ businesses globally — one of Australia's largest HR tech platforms

Cons

Per-employee pricing with high minimums: Lite $200/month minimum means businesses under 10 employees pay more per head
Significantly more expensive than standalone payroll: $20/employee vs KeyPay $4/employee or Payroller free for 1 employee
Prices exclude GST — actual cost is $22-66/employee/month incl. GST
Phone support locked to Unlimited plan ($60/employee/month) — Lite and Plus get email and chat only
Rostering described as basic — lacks staff list views, advanced filtering, and live budget forecasting compared to Deputy or RosterElf
No accounting, invoicing, or BAS lodgement — requires separate accounting software (Xero, MYOB, QuickBooks)
HR features (performance management, recruitment) may be overkill for businesses that only need payroll
Support limited to AEST business hours (Mon-Fri 8am-6pm) — no 24/7 support

Who Should Choose Xero

Xero is best suited for businesses that need small business, sole trader, accountant managed.

Choose Xero if you are:

Small Business
Sole Trader
Accountant Managed
Growing Business

Who Should Choose Employment Hero

Employment Hero is best suited for businesses that need growing business 10 plus, hospitality, retail.

Choose Employment Hero if you are:

Growing Business 10 Plus
Hospitality
Retail
Healthcare
Hr And Payroll Combined
Modern Award Compliance