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Paycycle acquisition update and pricing

We’re delighted to announce Australian payroll provider Paycycle has over 1000 customers. You may recall Xero acquired Paycycle in July.

This is a fantastic milestone for the Paycycle team which is now part of the Xero family. It’s also testament to the team’s hard work given that the product was only launched 18 months ago. We’ve been extremely busy working toward bringing payroll into the Xero core product in Australia. As the co-founder of Paycycle I’ve been tasked with the responsibility to deliver this important project and I thought it timely to give you an update on our progress, as well as our proposed pricing and availability.

The plan had always been to switch Paycycle’s Silverlight framework for the much more broadly accepted technology base of HTML5. Fortunately, the timing of our acquisition by Xero allowed us to focus on this with even more determination and tap into the the fantastic talents of the design team based in Wellington, New Zealand. The result being all the great Paycycle features you’ve come to know in a beautifully presented, Xero style application.

In December or January we’re looking to release the new HTML product. Existing customers will continue to use the application from paycycle.com.au and apart from a significant visual change, all your data, past payroll, payslips and information will behave as normal. For the next few months Paycycle will continue to be a stand alone product until we are ready to release the entire integrated payroll functionality into Xero in Q1 of 2012.

The screenshots above and below give a sneak preview of what payroll in Xero will look like. Notice the style is closer to Xero Personal which is really setting the design standard for web applications.

Employee Details Screen

Payroll Screen

We’ve also finalised our pricing for the integrated release. For Australian customers only, integrated payroll will be available under the Small Plan for one employee, up to 20 employees on the Medium Plan and unlimited employees on the Large Plan, which also includes automatic superannuation payments. There are no changes to the current pricing for Xero plans.

In nearly all cases those who use both Paycycle and Xero now, will enjoy the benefit of integrated payroll in Xero for the price of a only a Xero subscription. I’m sure you’ll agree this is a fantastic result for our joint customers and partners.

For Paycycle customers who are not Xero customers, we’ll be in touch early next year to work with you on the continuing arrangements. For Xero customers using the existing payrun functionality, you’ll be able to continue as normal for a period of time. Should you choose to move using the new integrated payroll,  that’s no problem, you can do that too.

Having built payroll once, and having received a great deal of feedback about what is good and bad, we’d like to make quite a few changes the second time around. However we’re still quite limited in what we’re able to do due to our primary focus for now being the conversion from Silverlight to HTML5. Once this first HTML5 release has been completed, we’re keen to incorporate even more payroll functionality with great design so that Xero’s Australian customers have the best integrated payroll imaginable.

 

Read more about Business, Australia

 

27 comments

Andrew Haynes
21 October 2011 #

Lot’s of happy clients with this announcement! Not only do the HTML 5 screenshot look very sexy but most importantly the cost will be dropping significantly when the subscriptions merge.

The cost of the two subscriptions (Xero + Paycycle) was a stumbling point for some people but those days will soon be over.

Lisa Reynolds
21 October 2011 #

Looks great. Any plans to do the same for NZ customers?

Stuart McLeod
21 October 2011 #

@Lisa,

Not at this stage. The NZ market is well serviced with the likes of SmartPayroll and iPayroll. We’ll get through Australia first! And then see what next year shapes up like.

Cheers,

Stuart.

Devan
21 October 2011 #

Nice! We actually looked at Paycycle last year, but opted not to go ahead with it because it was based on Silverlight technology. As we predicted back then, it appears to be another ‘dead end’ technological road with Microsoft, and DHTML5 seems to be gaining momentum all the time.

As a current Xero Accounts user, we will definitely be switching over and starting to use Xero Payroll when it is available. I assume there will be a facility to import current payroll YTD balances in if we start using as of Jan 2012?

Stuart McLeod
21 October 2011 #

@Devan,

We do have import facilities from desktop based systems that you will continue to be able to use. If you’d like to just set opening balances within the system as of a certain date (based on some reports that you produce), that’s not problem as well.

Kelvin Hartnall
21 October 2011 #

@Stuart, great looking screenshots! I have a couple of questions about the possible use of this functionality across all regions.

In your opinion, how much of this functionality is generic and could apply to any geographical region and how much is country specific? My assumption is that most regions have similar rules but with different names and different thresholds. For example, Australian super versus NZ Kiwisaver. So what percentage of your implementation do you feel is truly generic reusable functionality versus specific to Australia?

My second question follows on from the first. Assuming that most of the functionality is generic and reusable across regions, would it be possible to implement a version that contains no country specific assumptions? And then have a way for a user to specify their country specific rules? E.g. tax on first $x at y%, etc…

Stuart McLeod
21 October 2011 #

Thanks @Kelvin, appreciate the compliments. The Xero design guys are extremely talented!

The jurisdictional functionality differences differ between region. For instance, in our research, Australia is about a 70% fit to the UK. New Zealand is quite a bit higher than that.

To your question regarding country agnostic payroll, it’s a really difficult problem to solve. To their (our!) credit, before we became part of the Xero family, Xero rolled out the payrun functionality throughout the world. Which goes some way to what you’re talking about. However what we found was that in markets where payroll has been inbuilt in to desktop based systems for years, it’s very difficult to retrain the market to expect payroll to be separate from the ledger. Customers also expect that their payroll systems are built for their region, with a lot of the “smarts” already inside. So as much as a global solution to payroll would be wonderful, it’s a difficult problem to solve.

Cheers,

Stuart.

Steph Hinds
21 October 2011 #

As always Xero you rock! It’s fantastic to see a product that continues to create a better experience for the user. Can’t wait for the integration and some more funky features :)

Elizabeth Salter
21 October 2011 #

Love Xero, love Paycycle and the integration is going to make it even better. Looks good & I can’t wait!

And also, Stuart, I like your term “country agnostic payroll”. :)

Nigel
22 October 2011 #

Looks good! Will this be coming to the UK? And does 20 employees mean 20 employees actually getting paid that week/month or 20 employees details stored in the system, whether or not they actually work that week?

Accountancy
22 October 2011 #

WOOHOO!!! Thanks Xero!!!

Darren McMahon
24 October 2011 #

Awesome work. Can’t wait for it to be fully integrated.

Tim @FGS
25 October 2011 #

Yet another reason why Accountants are insane if they are not aboard the Xero Express

Keep it coming guys

Taryn
28 October 2011 #

Sorry to be a dunce, but are you saying that we will just keep paying for our current Xero plan and no longer have a Paycycle bill every month?

When does the new pricing structure take effect?

Have you incorporated reports into the Xero interface?

Really excited about these changes. They just can’t happen quickly enough.

Stuart McLeod
28 October 2011 #

Hi @Taryn,

Yes that’s what we’re saying. When Paycycle is integrated in to Xero early next year, the current Xero pricing structure stays in place, and a medium subscription will entitle you to 20 employees or less for payroll. A large subscription has unlimited employees and automatic superannuation payments.

The Paycycle HTML release later this year will not have any reporting changes. The integrated version next year will have a completely revamped reporting functionality.

These things take time!

Stuart.

Ari Maniatis
28 October 2011 #

Not so happy that the price (for us) just went from $29 per month to $49 with no additional functionality. And since you are converting in the middle of a financial year, we have almost no way to extract ourselves from your new enforced pricing.

What features will be available under each of the new plans? Will it be possible to use payroll without using the entire Xero accounting system (we already have a better accounting system in place).

Adam
2 November 2011 #

Ari, I assume you are an existing Paycycle customer without a subscription to Xero? (otherwise cost would assumedly be going down). They stated they will be talking with people who are Paycycle, but not Xero, customers early next year to conitnue their arrangements.
Looks good guys! Wish we had this in NZ, but realise the requirements are pretty different.

Stuart McLeod
2 November 2011 #

@ari,

As I said in the blog post, we’ll be in touch with existing Paycycle (and non Xero users) early next year with a plan around ongoing arrangements. Clearly, there will be a need to accomodate those existing Paycycle customers who are only using the payroll component in the integrated version. We won’t be just turning off your account, so “extracting yourself from our enforced pricing” won’t be necessary.

Thanks for your feedback.

Seb
16 November 2011 #

as asked before – can you explain the 20 limit?

1) does this mean the limit is 20 employees in your accounts, or 20 payments made every payroll

2) if you have more than 20 employees requiring regular payment, will we be able to use other payroll software and stay on the medium plan?

cheers,
seb

Stuart McLeod
16 November 2011 #

Thanks so much for your question @Seb.

The same rules to our pricing will apply as they always have. You can read more about that here. However it means the payroll, in your example, of 20 employees during your billing period. As to your second question, sure, I guess you can use any payroll software you like! Although I’m sure that for the extra $15 per month the benefits would far outweigh the cost.

Cheers,

Stuart.

Serge Crismale
18 November 2011 #

I am finding new clients that want to move onto xero and require payroll. I am an avid paycycle user as well. If I set these clients up on Paycycle – will the effort put into setting them up and training the clients in paycycle be a waste of time? Will Paycycle static data and payrun histories automatically migrate across to xero. Alternatively should they just continue in MYOB until Q1? I would love to set them up in Paycycle now and then have everything in Xero overnight…
What are your thoughts – should i be patient for Q1.

Stuart McLeod
18 November 2011 #

Hi Serge,

Go for it! Start loading your clients up in to Pacycle. We’ll make sure that all the data comes in to Xero seamlessly when we implement the integrated version.

Cheers,

Stuart.

Claire Bower-White
14 December 2011 #

We have just signed up with Xero, but find that the capabilities of PayCycle are insufficient for our needs (I don’t want to manually calculate tax, it doesn’t appear to support salary sacrificing or the calculation of FBT) so we decided to sign up with another of your payroll partners. It now appears that we are unable to integrate with them as they seem to have been removed from your “Xero Network” page. What’s going on? This is NOT a good start!

Stuart McLeod
14 December 2011 #

Hi Claire,

That all sounds a little strange. Are you in Australia? Are you sure that you signed up at http://www.paycycle.com.au? Paycycle supports automatic tax calculations, salary sacrifice and FBT. Paycycle will be integrated with Xero in the first half of 2012.

Cheers,

Stuart.

CG
19 December 2011 #

Sounds as if a new micro-user (1 or 2 employees) would be wise NOT to sign up for Paycycle if they don’t envisage ever using Xero. Would that be a correct assessment?

Stuart McLeod
19 December 2011 #

Hi @CG,

It’s true that we don’t operate a freemium model at Xero, however we’re still working through all the pricing combinations and issues. I wouldn’t ever say that it’s not wise to sign up though.

Cheers,

Stuart.

James
3 December 2012 #

Another vote for bringing it to New Zealand – we would love to switch over to a Xero Payroll system

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