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Bringing full-service payroll to customers in all 50 states

Posted 1 year ago in Xero news by Steve Sharpe
Posted by Steve Sharpe

We’re thrilled to announce a new partnership that will allow us to combine the power of Xero’s global accounting platform with Gusto’s innovative full-service payroll solution.

From onboarding new employees, to filing state and federal payroll taxes, to ensuring there is enough cash-flow available on pay-day — managing payroll is a major pain point for small businesses and accountants.

Small businesses using Gusto spend 75 percent less time managing employee payroll than before they started using the service. That’s because Gusto’s innovative, born-in-the-cloud service handles all aspects of payroll on behalf of the small business owner. Highlights include:

  • Payroll made easy. Gusto enables businesses to run payroll completely online with modern software and design. All federal, state and local payroll taxes are automatically paid and filed.
  • Data synced and automated. Gusto automatically syncs payroll and financial data with Xero, as well as popular expense tracking and time tracking software.
  • HR built for today. Gusto also integrates with workers’ compensation, benefits like health insurance or 401(k) retirement plans, and human resources, providing compliance, ease and flexibility.

Over the coming months, Gusto’s product will be deeply integrated into the Xero platform and become the preferred payroll solution for our US customers. Highlights of this integration will include:

  • Single Sign-On: Xero will deliver a beautiful user experience by giving customers the ability to seamlessly access their Gusto account using their Xero credentials.
  • Managing Cash Flow: Xero will be automatically updated every time payroll is run, providing an always up-to-date view of cash flow.
  • Accountant Collaboration: Small businesses will be able to grant their accountant or trusted advisor permission to manage payroll and generate payroll reports within Xero.

We are working with our existing self-service US payroll customers to ensure that there is a smooth transition as we integrate Gusto’s more robust full-service product onto our platform. We are providing these customers with a wind-down period, so that they can continue using the existing service until they transition to Gusto.

Xero and Gusto have a shared vision for building innovative new solutions that help small businesses and accountants thrive in the new economy. We’re both born-in-the-cloud companies working to build software that makes complicated business tasks more simple and human. By joining forces, we can help more small businesses and accountants find long-term success.

For more information, please see this FAQ.

97 comments

Valerie McCoy
July 20, 2018 at 12.58 pm

What is the cost of using Gusto?

Joanne Tait in reply to Valerie McCoy Xero
July 20, 2018 at 2.51 pm

We will be providing additional information as we complete the integration with Gusto. This will include full pricing details, and a special offer available exclusively to Xero customers.

Douglas Turner in reply to Joanne Tait
August 29, 2018 at 7.46 am

For the price of Xero and Gusto combined you can just go to QuickBooks… We transferred to Xero because of the significant cost savings… The accounting system is not superior it is really complicated not to mention support is poor to say the least… We will be returning to QuickBooks

Steven
August 30, 2018 at 1.46 am

As will we!

Josephine
August 30, 2018 at 4.52 am

This makes no sense. The only winner here is Xero! They make the same amount of money from their customers….delivering less services themselves….while telling us they are providing “better services” that we can generously PAY EXTRA for. Wow…thx for the new option…I’m leaving as well. I will pay basically double what I’m paying now for the new option.

Sarah Richards in reply to Josephine
August 30, 2018 at 8.05 am

Hi Josephine – thanks for your comment. I understand that you are disappointed that we will no longer be providing our built-in payroll product. Gusto is a great payroll solution, and the price does reflect its value. We know Gusto might not be for everyone, I’m sorry to hear this is the case for you. We do have other payroll integrations, which you can see in our App Marketplace – I hope you’ll take the time to consider them. Thanks again for providing your feedback.

Nancy Leach
July 21, 2018 at 11.21 am

It doesn’t matter. It will be so much better you’ll think you’ve died and gone to heaven.

KMP
August 29, 2018 at 9.19 am

Yes, it kind of really matters.

After the initial introductory offer Gusto will cost Xero users and ADDITIONAL $39/month + $6/month per employee. This additional expense added to the mid-tier Xero plan will in some cases TRIPLE the cost of using Xero if not more.

Robert Ungemach
July 20, 2018 at 1.10 pm

Why are you breaking something that works, simply, perfectly, beautifully, every time? This is very disappointing.

Joanne Tait in reply to Robert Ungemach Xero
July 20, 2018 at 2.50 pm

I’m sorry to hear that you are disappointed. We will work with you to ensure that there is a smooth transition and will provide options for migrating easily to the new integrated product when it becomes available. Small businesses using Gusto spend 75 percent less time managing employee payroll than before they started using the service. That’s because Gusto’s innovative, born-in-the-cloud service handles all aspects of payroll on behalf of the small business owner.

KMP in reply to Joanne Tait
August 29, 2018 at 9.14 am

Yes Joanne, however this claims to solve a problem that didn’t exist, spending too much time on payroll. Xero Payroll was working just fine and we were not really spending too much time getting payroll done, it was actually kind of quick. Now, what Xero has done is kept the original price point the same but removed a large piece of functionality that was previously included. This functionality is now being replaced with an expensive solution, every dollar of which will be an additional expense to our businesses.

After the initial introductory offer Gusto will cost Xero users and ADDITIONAL $39/month + $6/month per employee. This additional expense added to the mid-tier Xero plan will in some cases TRIPLE the cost of using Xero if not more.

Before this, Xero had Quickbooks beat hands down and was always my recommendation whenever anyone asked, but now I’m not so sure anymore anymore. Since Quickbooks with Payroll is now actually going to be less expensive (when choosing a plan that closely matches the current Xero plan), I may have to reconsider.

So, thank you for your reply, but to reiterate Robert’s totally justified sentiment, this is still very disappointing!

Tim Quartly-Watson
July 20, 2018 at 5.00 pm

Agree wholeheartedly with Robert Ungemach. The current system works well and causes me no grief. The 75% less time quote does not say detail whether comparison was with a manual system. “We will include full pricing details..” does not leave a warm feeling that the price will not escalate for features I don’t need.

Steve Sharpe in reply to Tim Quartly-Watson Xero
July 21, 2018 at 4.00 am

We appreciate your feedback. The 75% stat is a reference to the amount of time customers spend on payroll than before they started using Gusto. This is because Gusto handles all aspects of payroll, including all federal, state and local payroll taxes.

Todd Boyle
July 21, 2018 at 1.52 am

I second what Robert said. You purchased Monchilla to integrate the payroll function which has worked well for our small business for a few years now. I don’t spend much time with payroll and related taxes now. Looking at Gusto’s pricing, appears regardless of what discounting they provide – likely be paying more for Gusto to get similar level of functionality. Not to mention learning new system in month of January.

Steve Sharpe in reply to Todd Boyle Xero
July 21, 2018 at 3.56 am

Thanks for your comment. We will be providing additional information shortly, including full pricing details and a special offer available exclusively to Xero customers. It’s also important to note that Xero is an open ecosystem, so you will have the option to use the payroll provider of your choice if you determine that Gusto’s full-service solution is not the right fit for you.

Cesar Eljuri
July 20, 2018 at 4.31 pm

Xero payroll works very well for me so far I am not have any complain about it, and the best it is the cost we pay monthly, now I hope not increase double or more because that service is good but expensive..
For my opinion has to be optional or in that states xero payroll not work.

Steve Sharpe in reply to Cesar Eljuri Xero
July 21, 2018 at 4.54 am

You will absolutely have options. Gusto’s full-service payroll product will be deeply integrated into the Xero platform, but Xero is an open ecosystem, so you will continue to have the option to use the payroll solution of your choice.

Jamie warrick in reply to Steve Sharpe
August 5, 2018 at 11.31 pm

So are you saying that we will have a choice between using Gusto and what we are currently using in Xero after 1 January 2019? According to the article it made it sound like what we are currently using will not be offered after 1 January 2019.

Steve Sharpe in reply to Jamie warrick Xero
August 7, 2018 at 5.37 am

Xero payroll will be available through December 31, 2018. We are providing this transition period so that you can switch to Gusto, or another payroll service of your choice.

Paul Dalia
July 21, 2018 at 2.23 am

First expenses and now payroll… The only reason I chose Xero over Quickbooks was because it included payroll and it worked great. Sad to see it go and I really hate working with add-ons because they are just that, add-ons. To state something like Gusto saves 75% time is a useless statement, 75% less time compared to not using any software? I highly doubt it will save 75% of my time compared to how it was previously done in Xero. Really sounds more like Xero is not able to keep up with the demands of accounting software so they are breaking pieces off. I wouldn’t be surprised if you removed invoicing next since add-ons can probably do that better.

Steve Sharpe in reply to Paul Dalia Xero
July 21, 2018 at 3.46 am

Thanks for your comments – we appreciate your feedback. The benefit of Gusto is that it is a full featured, full service payroll offering that handles all aspects of US payroll on behalf of the small business owner, including all federal, state and local payroll taxes. We’ll be deeply integrating Gusto within the Xero platform, with features such as single-sign-on, to provide a seamless experience. We are committed to working with you to ensure that there is a smooth transition.

KMP in reply to Steve Sharpe
August 29, 2018 at 9.24 am

Yes, we get that it will be integrated, but it will be an entirely additional expense and Gusto alone actually costs more that Xero.

After the initial introductory offer Gusto will cost Xero users and ADDITIONAL $39/month + $6/month per employee. This additional expense added to the mid-tier Xero plan will in some cases TRIPLE the cost of using Xero if not more.

David Sosa
July 21, 2018 at 12.11 pm

This is deeply disappointing. We have half of our clients on Xero Payroll and the other half on Gusto. Gusto works great, most of the time, but they’ve increased prices several times in the last few years to the point that it’s no longer cost-effective for us. Xero Payroll works very well for us and I can’t imagine how our costs won’t increase substantially with this change.

Steve Sharpe in reply to David Sosa Xero
July 21, 2018 at 12.36 pm

Sorry to hear that you are feeling disappointed. We made this decision based on feedback that the majority of our small businesses and accountants want a full featured, full service payroll offering. However, we understand that full-service payroll isn’t the right fit for everyone. That’s why we will continue to give customers the option to use the payroll solution of their choice and integrate with Xero’s open platform.

KMP in reply to Steve Sharpe
August 31, 2018 at 3.30 am

Steve,

It’s been stated many times here that Xero is an open ecosystem with add-on functionality ( of which Gusto is an existing add-on), therefore, the “majority of your small businesses and accountants” that needed Gusto could have always chosen it as an add-on for their needs and paid the price. Now we are all forced into using it. This change clearly solves nothing for the customer since Gusto was always an available option.

Xero really needs to stop making this claim in an attempt to spin this as a positive for its customers when there is clearly no positive in this at all that didn’t already previously exist.

Sherri Brady
July 22, 2018 at 10.40 am

Very disappointed, as a very small business the draw to Xero was the ability to do payroll, invoicing and accounting all within one system without additional costs for each element. If Xero is going to become one of those add on pricing to get features systems I will begin to look for a better software solution that is all inclusive. Unless Gusto is free to all Xero customers it comes with an additional cost, for features we already get for the cost of the Xero membership. so unless Xero is going to decrease my fees by the amount of the cost of Gusto every month then this is a bad deal for consumers.

Steve Sharpe in reply to Sherri Brady Xero
July 22, 2018 at 11.42 am

Thanks for your feedback. We will be sharing full details about pricing shortly. We will give you ample time to assess the new solution and make the right choice for your specific needs. While the majority of our customers have told us they want a full-service payroll solutions that handles all aspects of payroll — including all federal and state taxes — we understand that a full featured solution is not for everyone. That’s why Xero is an open ecosystem that gives you the choice to integrate the payroll solution of your choice.

Barbara
July 22, 2018 at 1.43 pm

I’ve had two accounting firms tell me that Gusto is preferred because in Xero there are things that go a bit sideways with how much tax is owed. I think it was paying too much and having to swing back and get a state to refund. I’m just a startup so I didn’t pay much attention and am using Xero, but I look forward to being able to integrate with the Michigan tax system online, whichis not intuitive, if possible at all,from within Xero.

Steve Sharpe in reply to Barbara Xero
July 26, 2018 at 10.22 am

Thanks for sharing your feedback. We believe that the deep integration we are building between Xero and Gusto will provide you with a better payroll experience. One of the key benefits of this full service payroll offering is that Gusto handles all aspects of US payroll on behalf of the small business owner, including all federal, state and local payroll taxes.

PJ in reply to Steve Sharpe
July 31, 2018 at 2.53 am

wait, I don’t get it. Xero already does all aspects of payroll including federal state and local taxes? Am I missing something. Xero tells me how much I owe and I pay it by clicking a button. Bummed out too, came to Xero because it included payroll at a good cost. Is there a non full service payroll you can recommend?

Steve Sharpe in reply to PJ Xero
July 31, 2018 at 4.44 am

Unlike Xero’s existing US payroll service, Gusto is a full-service payroll solution. For example, Gusto automatically files your payroll taxes and generates your W-2s. We understand that Gusto won’t be the right fit for every business. That’s why you are free to choose any solution that works best for you. Here are our Payroll + HR category apps in the Marketplace. These apps all have certified integrations to Xero.

KMP in reply to Steve Sharpe
August 29, 2018 at 9.33 am

Steve,

Xero did all of this automatically as well. Xero is essentially cutting features but not price and forcing us into one add-on or another at an additional cost to get the same job done. Xero will probably save a considerable amount of money not having to support the payroll features any longer but are not passing this savings down to its loyal customers. This is a very bad move by Xero on its customer base.

Considering this, I think instead of evaluating if Gusto is a good solution for my payroll needs, I will evaluate if Xero is now a good solution for my accounting needs.

Tracy Hebert
July 23, 2018 at 8.34 am

Will we still be able to do payroll in Xero?

Steve Sharpe in reply to Tracy Hebert Xero
July 23, 2018 at 10.27 am

We will be deeply integrating Gusto into the Xero platform, with features such as single sign-on. Once the integration is live, Gusto will become our preferred payroll offering in the US. That means that we will be winding down the existing US Xero payroll product by December 31, 2018. We will work with you to ensure that there is a smooth transition and will provide options for migrating easily to the new integrated product when it becomes available.

KMP
August 31, 2018 at 3.33 am

Tracy,

Simply put, no you will no be able to do payroll in Xero any longer and you will pay a considerable amount of money more for the Gusto integration monthly.

Joey Riso
July 24, 2018 at 11.21 am

So Xero has figured out a way to shed functionality while keeping their prices up, and forcing us to pay more to get what we (presumably) already had. Brilliant.

But for what it’s worth, Xero’s payroll has been a nightmare for us, and they don’t have a clue when it comes to support.

Maybe it’s time to go back to Quickbooks or try Freshbooks.

Steve Sharpe in reply to Joey Riso Xero
July 26, 2018 at 10.19 am

Sorry to hear that you feel that way. We made the decision to partner with Gusto because the majority of US small businesses and accountants told us they wanted a full featured, full service payroll offering. Gusto delivers this, handling all aspects of US payroll on behalf of the small business owner, including all federal, state and local payroll taxes. It’s important to note that our existing payroll solution will be available until December 31, 2018, and we will provide all impacted customers with an update on pricing well in advance.

Patti Scharf
July 25, 2018 at 3.55 am

Don’t be disheartened by the negative comments here.

You are absolutely on the right track and should’ve done this YEARS ago.

Xero accountants all across the US are thanking you even if they haven’t commented here (and even if they don’t know they’re thankful yet).

Steve Sharpe in reply to Patti Scharf Xero
July 25, 2018 at 4.44 am

Thanks for the kind words, we’re very excited about this partnership!

KMP
August 29, 2018 at 9.42 am

I don’t think the negative comments here should be ignored or taken lightly. These are the comments of loyal paying customers. If I’m not mistaken and I maybe since I am only a Xero paying customer and I do not use a “Xero Accountant”, but don’t Xero accountants just provide a [paid] service to actual Xero paying customers (unless of course the accountant uses Xero themselves)?

The comments you see here are real and come from paying customers that are disappointed by this move from Xero cut features and increase costs to it user base. These comments will be the majority, not those of the Xero Accountants.

Tammy Hannon
July 25, 2018 at 1.35 pm

Very disappointing. I chose Xero due to the self-service payroll and the fees were included in the monthly Xero fee. This is no longer the case. Does this mean my Xero subscription will be reduced to account for the fact that we are essentially being forced to choose a full service payroll provider now. I canceled my full service payroll provider for this very reason. Very disappointing. Will likely look to other accounting solutions. I have already checked out the Gusto pricing and it will in no way save me any money. I am very small business and self-service payroll takes very little time as it is. Adding a cost for payroll provider now will cost me more money.

Steve Sharpe in reply to Tammy Hannon Xero
July 26, 2018 at 10.15 am

We understand that this is not an easy change, and sincerely apologize for the inconvenience. The existing US payroll product will be available until December 31, 2018. This is designed to give you a wind-down period, so that you can continue using the existing service until you transition to another payroll solution. We will be updating our pricing as these changes are implemented. Xero is an open ecosystem. That means that you will continue to have the choice to use the apps that best meet your individual needs, including other payroll solutions.

Erin Mahaffey
July 27, 2018 at 3.12 am

Thank you, Xero, as always for providing support! Reading these comments has helped me understand better what this change could mean for my company. I appreciate your transparency in sharing your clients’ feedback, along with your response. I don’t yet know if this will be a good fit for my company, as we are very small, but your commitment to providing excellent customer service goes a long way in my book.

Steve Sharpe in reply to Erin Mahaffey Xero
July 27, 2018 at 4.16 am

Thank you! We know this isn’t going to be an easy change for everyone, so we really appreciate your understanding.

Will Gordon
July 30, 2018 at 7.45 pm

It is very disappointing to hear about this “improvement”. The functionality there today worked for me. The very reason I selected Xero in the first place was that the (more expensive) plan I selected INCLUDED payroll. We are a very small business with one employee and one contractor. Payroll works great for us and the time it took was just minutes a month. Xero, you are taking something AWAY from us that was INCLUDED to improve something that I did not need improved. Maybe others will be happy but if I have to pay MORE for something I did not need, it won’t be welcome. Do you understand all your customer segments? Not to mention your existing pricing plan and service description INCLUDED payroll. Sounds like a problem you’ll have to solve.

Will your struggles to deliver Invoicing be the next “improvement” that will cost me more? Then having one employee will cost me more with Gusto and one contractor will cost me more with your next move to improve our experience with a new Invoicing partner. What’s after that? A more secure Single Sign-On solution that’s necessary to work across all your integrated partners that we will have to pay for?

Your response to date, that you’ll keep Xero open so that we can use the payroll provider of my choice, means nothing to me, since you, Xero, are the payroll provider of my choice.

Luckily, you will make a transition to another bookkeeping/accounting cloud service provider easier since you’ll keep your payroll service going until the end of 2018. The beginning of a new year is always cleaner to start anew somewhere else……if necessary.

Steve Sharpe in reply to Will Gordon Xero
July 31, 2018 at 5.11 am

Thank-you for your comments. We certainly appreciate that this is a big change. We will indeed make our existing payroll solution available until December 31, 2018, to ensure that there is a smooth transition to Gusto, or another payroll provider of your choice. We will be sharing full details about pricing shortly. We will give you ample time to assess the changes and make the right choice for your specific needs.

Matt J.
August 29, 2018 at 7.27 am

I could not agree more. The big problem with “Cloud” based solutions is that the pricing can shift (in our case 300%) in a blink of an eye.

pj
July 31, 2018 at 2.55 am

Question. What about 2018 w2s? Xero never has had these ready until way after the end of year.

Steve Sharpe in reply to pj Xero
July 31, 2018 at 4.50 am

You have the option to continue using your existing account through December 31, 2018. If you do so, Xero will handle your 2018 payroll taxes. We’re committed to working with with you to ensure there is a smooth transition to Gusto, or the payroll solution of your choice.

pj
July 31, 2018 at 3.07 am

yikes just looked at Gustos current pricing $39/mo plus $6/employee. that’s over $800 more a year for this small business with 5 employees. Even if you work out an intro price to switch, eventually I’m sure we’d be up to their standard pricing 🙁 ouch. I understand though it is whats best for Xero, just not for some of your clients. ugh. 🙁

Steve Sharpe in reply to pj Xero
July 31, 2018 at 4.39 am

We understand that Gusto isn’t the best fit for everyone. That’s why you are free to choose any solution that works best for your business. Here are our Payroll + HR category apps in the Marketplace. These apps all have certified integrations to Xero.

Pam
August 29, 2018 at 6.35 am

So utterly disappointing to lose payroll functionality that has worked perfectly and to have my monthly costs more than double just to pay one or two employees. I will stop recommending Xero to people with small businesses like mine, and will start looking for a new solution. What a shame, Xero was such a good product.

Sarah Richards in reply to Pam
August 29, 2018 at 8.08 am

Hi Pam – I’m sorry to hear that you’re disappointed. We really took on board feedback from our customers who wanted a full-service payroll solution. We pride ourselves on having an open ecosystem. If Gusto isn’t for you, please check out our App Marketplace for payroll app partners that have certified integrations with Xero.

Peter Goldie
August 29, 2018 at 6.51 am

Super disappointed in this change. I moved from QB to Xero because of the great value- with accounting and payroll for $30/mo. Now, even with just one employee, my Xero + Gusto would be $75/mo – that’s not a typical 10% price increase, its a 150% price increase! Need to review other options now – my trust and love of Xero are now damaged.

Sarah Richards in reply to Peter Goldie
August 29, 2018 at 8.25 am

Hi Peter – I’m sorry to hear you’re disappointed, we know this is a big change. Gusto’s pricing reflects the fact that it is a full-service payroll solution that handles payroll administration on behalf of you, the user. If Gusto isn’t for you, I hope you’ll consider our other certified payroll app partners, which you can find in our App Marketplace.

KMP in reply to Sarah Richards
August 29, 2018 at 9.49 am

THe combination of Gusto and Xero is simply way too expensive now. Any add-on solution with Xero is a major increase in cost.

It’s time to evaluate a replacement for Xero, not Gusto.

This is a real shame, many Xero customer will be leaving especially once the reality of the new additional costs sets in.

Grant
August 29, 2018 at 7.13 am

Count me as another very small business (2 people) that selected Xero for the purpose doing payroll quickly and simply in one place for a reasonable price. If your goal is to run off all your small clients then you will be wildly successful with this change. In one year we’ve seen a 400%+ increase in cost.

Sarah Richards in reply to Grant
August 29, 2018 at 8.49 am

Hi Grant – I understand that this is a big change for a small business owner such as yourself. We had no intention of alienating a particular group of business owners, rather, we wanted to give more Xero users access to full-service payroll with a solution like Gusto. We pride ourselves on our open ecosystem and if Gusto isn’t right for you I hope you’ll consider our other certified payroll app partners, available on our App Marketplace. Thank you for taking the time to provide your feedback, we appreciate it.

KMP in reply to Sarah Richards
August 29, 2018 at 10.02 am

Sarah, please understand that this position Xero is taking of “providing access to a full-service payroll solution such as Gusto” really doesn’t hold any water at all. Just like all other add-ons, Gusto could have been utilized by those that wanted the additional functionality and were willing to pay for it. There are add-ons that replace much of the functionality Xero offers but they remain just that, add-ons that the user can choose. This is a feature cut by Xero, plain and simple.

And this other position of Xero being an “open ecosystem” so we can “consider another payroll partner” if we want is just as ridiculous, since we already did choose a payroll provider, Xero. This move just makes us want to evaluate another accounting solution.

Matt J
August 29, 2018 at 7.25 am

According to this, I will pay $30 for my entire accounting package (same as today) -AND- an additional $69 for JUST PAYROLL!
You know, I moved to Xero because I got sick of the ridiculous fees. Intuit started add-on’s for every this and that, which is primarily the reason I left them. It now seems you are following suit. I can see a small increase, but 300%??? In a word: Ridiculous!

Sarah Richards in reply to Matt J
August 29, 2018 at 8.39 am

Hi Matt – we know that this is a big change and I’m sorry that you’re disappointed. Gusto is a full-service payroll solution, and it’s pricing is reflective of that. In order to ease the transition, we are offering existing Xero Payroll customers special discounts:

Move to Gusto now: Move to Gusto and process payroll before November 1st to receive free payroll through December 31, 2018 AND receive 50 percent off monthly subscription fees for the first 6 months in 2019. With this option, you will work directly with Gusto to set up your new account. Log in to your Xero payroll account for more details.

Move to Gusto after November 1: Move to Gusto between November 1st and December 31st and receive 50 percent off monthly subscription fees for the first 6 months in 2019. With this option, Xero will help you move your data and you’ll get to preview the integration ahead of processing payroll with Gusto starting January 1, 2019.

We know that Gusto might not be for everyone. Xero has an open ecosystem, which means you can choose the payroll solution that best suits you. You can look at the options in the App Marketplace. Thanks for your comment – we really do appreciate you taking the time to provide your feedback.

Sherri Brady
August 29, 2018 at 7.31 am

So to be clear is this change to add Gusto $39 +6 per user per month in addition to my current Xero memebrship? If so that more then doubles my accounting costs and I definitely need to look into new accounting options. That is too much for a single employee small business. I chose Xero since it did all I needed for a small fee. I’m sure the payroll is great for a bigger company, but this will cost me more then double for the same things I am using now in xero. Are there no options for a small company like mine to keep these costs down? If it was $39 total for the Gusto and Xero then I would be ok with the change, but this is a big hike. I feel like this type of change sort of holds your clients hostage as most people can’t easily switch over their accounting systems at any time; meaning many people will be forced to just pay so they can keep managing their business. instead of a major accounting overhaul right at tax time.

Sarah Richards in reply to Sherri Brady
August 29, 2018 at 11.16 am

Hi Sherri – thank you for your comment. Yes, Gusto’s monthly subscription fee starts from $39 + $6 per user. We believe that Gusto’s full-service payroll solution has a rich feature set, which is reflective of its price. We understand that this might not be an easy transition for everyone, and we know there isn’t a one-size-fits-all solution for every business, which is why we believe it’s important to have an open ecosystem. Our App Marketplace showcases some of our other certified payroll app partners, I hope you’ll consider these options. Thank you again for your feedback.

Loren Broyles
August 29, 2018 at 7.32 am

It is disappointing that I changed accounting providers for the very reason that Payroll and Accounting were integrated for a one low cost. Now to see that if I keep Xero and Gusto, it will more than double my monthly bill. If I had known this was coming, I may have opted to stay where I was at in the first place. Boo on your decision. We are so small, that I wish you would continue to offer payroll yourself and let those that want more features move to Gusto.

Sarah Richards in reply to Loren Broyles
August 29, 2018 at 9.07 am

Hi Loren – I’m sorry to hear that you’re disappointed. We understand that this is a big change for small business owners such as yourself. It was the result of customer feedback that we made the decision to wind-down our existing US payroll product. The majority of customers told us they wanted a full-featured, full-service payroll solution – and we believe Gusto is the right fit for this. That said, we know there isn’t a one-size-fits-all solution for everyone. Our App Marketplace offers several payroll solutions – I hope you’ll consider some of the other options. Thank you for taking the time to provide your feedback – we appreciate it.

Joseph Jones
August 29, 2018 at 12.34 pm

I totally agree, I just moved over on July 1. Had I known this was going to happen I never would have. I guess I will go back to QB as it will actually save me money!

J Leadbetter
August 29, 2018 at 7.35 am

Attention Xero!! All of your customers aren’t happy about this add-on solution you’ve come up with. The reasons the majority of us are using your platform are the pricing structure and functionality. Apparently neither of these are very high on you list. We only have 2 employees on the payroll, yet our cost is going to triple with Xero’s fee doubling and the addition on Gusto. We don’t need all these unwanted features that this add on is offering!! I’m sure someone out there is developing an affordable and user friendly platform (like Xero once was) out there…we will just have to start searching for it…

Sarah Richards in reply to J Leadbetter
August 29, 2018 at 11.26 am

Hi Jared – thanks for your comment. We definitely appreciate that this isn’t an easy transition for everyone. We take customer feedback very seriously and, when assessing our existing US payroll product, we found that the majority of customers wanted a full-service payroll solution. We believe Gusto fits this criteria, although we understand that it might not be for everyone and I’m sorry that it isn’t simple enough for your needs. I hope you’ll consider whether there is a payroll solution that better fits your needs on our App Marketplace. Thanks again for your feedback.

Joseph Jones
August 29, 2018 at 7.47 am

I am very disappointed between this and other issues I think I will be headed back to QB Desktop

Sarah Richards in reply to Joseph Jones
August 30, 2018 at 3.12 am

Hi Joseph, I’m sorry to hear you’re disappointed – we definitely wouldn’t want to see you go. I have passed your feedback along to our team.

Arthur
August 29, 2018 at 10.30 am

“Sorry to hear that you’re disappointed” Cut and Paste response. — How disingenuous! Then” we didn’t intent to alienate small businesses” – but you did and you obviously don’t care. then to suggest “App marketplace offers several solutions” – all at additional cost.

It seems you’ve total chosen to ignore the basic objection of added costs for something many of us just don’t need at this point in time.

Yes, improving the service and having the Gusto option when we grow into it is great, but not if we don’t need it yet. With only one to two employees, you have $45 to $50/m additional costs added to use payroll now. That’s a 250% increase for services many of us don’t need. It’s just simply more cost for no added value.

I’m sorry you don’t really care about the smaller companies you service. By forcing the change to a paid service you “ARE” alienating your customers regardless of your intent.

I, for one, will discontinue to use payroll it’s not that hard to handle it quickly for one to two employees outside the system. When the day comes that I need services, I’ll likely look to Patriot Payroll as they have much more reasonable rates.

Sarah Richards in reply to Arthur
August 30, 2018 at 2.39 am

Hi Arthur – thanks for your comment. We do really appreciate you taking the time to provide your thoughts. I appreciate this is a big change and our DIY product may have been sufficient enough for your payroll needs, but we had so much feedback that it was just not good enough that we wanted to deliver a great option in Gusto.

KMP
August 29, 2018 at 10.35 am

This claims to solve a problem that didn’t exist, spending too much time on payroll. Xero Payroll was working just fine and we were not really spending too much time getting payroll done, it was actually kind of quick. Additionally, Gusto was always available as an add-on for those that wanted the additional features, now it is being forced because Xero is essentially issuing a feature cut.

Now, what Xero has done is kept the original price point the same but removed a large piece of functionality that was previously included. They will save money internally not haveing to support these features while this functionality is now being replaced with an expensive solution, every dollar of which will be an additional expense to our businesses.

After the initial introductory offer Gusto will cost Xero users and ADDITIONAL $39/month + $6/month per employee. This additional expense added to the mid-tier Xero plan will in some cases TRIPLE the cost of using Xero if not more.

Before this, Xero had Quickbooks beat hands down and was always my recommendation whenever anyone asked, but now I’m not so sure anymore anymore. Since Quickbooks with Payroll is actually going to be less expensive (when choosing a plan that closely matches the current Xero plan), I may have to reconsider.

Also, Telling us that Xero is open so we can choose another add-on if we wish is really a poor response. THere are very limited other add-ons in this category and most are not really an option. We already had a payroll provider, it was built into our accounting package, it’s why we choose Xero. The choice would have been different otherwise.

This is a move by Xero that only benefits Xero but hurts its customers.

Sarah Richards in reply to KMP
August 29, 2018 at 12.07 pm

Thanks for your comments. We hear all of your concerns and thank you for taking the time to provide your feedback.

Steve Lundy
August 29, 2018 at 10.42 am

Are Steve Sharpe and Sarah Richards twins? They both seem to be repeating exactly the same words many times over! (Clearly a scripted party line). But, seriously, Xero needs to find better ways to tell us bad news. I am getting quite used to receiving “Great news!” e-mails from Xero now. The very first thing I do is to look for the back-door price uplift!

Come on, Xero! We are supposed to be partners and we are your sales force. Many of us have been enthusiastic evangelists for Xero over a number of years and helped to grow your business. Please start treating us like partners again, not like passing trade.

Sarah Richards in reply to Steve Lundy
August 30, 2018 at 3.37 am

Hi Steve – thanks for your comment. We put accountants and bookkeepers at the heart of everything we do at Xero, and I’m sorry you don’t feel like this is the case in this instance. Thanks again for your feedback – I’ve passed it on to our team.

Will Gordon
August 29, 2018 at 10.51 am

Well, the new Xero pricing plans are out. There is NO change in the price for the 3 plan tiers, except that payroll has been removed from the middle and top tier. So we pay the SAME for LESS. In order to have payroll with their preferred option, Gusto, we are expected to pay $45 minimum ($39 for payroll with Gusto + 6 per user and we all need at lease one user, so 39+6 = 45).

So my company went from paying $30 a month for a fully functional bookkeeping/accounting/payroll solution, to having to pay $75 a month. MAKE NO MISTAKE about it. This is a huge price INCREASE!!!! Shame on Xero. What kind of kick-back are you receiving from Gusto? You really stuck it to my organization.

What I want is an admission that you instituted a huge price increase and you, Xero, hope we stick with you even you are sticking it to us.

And now for the: “We are sorry you’re disappointed,” “we know there isn’t a one-size-fits-all solution for everyone,” “we have several payroll solutions in our App Marketplace (but shhh don’t tell anyone because they’ll all charge you more than your middle tier Xero subscription)”.

Sarah Richards in reply to Will Gordon
August 30, 2018 at 2.53 am

Hi Will – thanks for your comment. This is undoubtedly a big change, but we’ve made it to meet the needs of the majority of our customers and we want the price to reflect the value we think we think our product has. Thanks again for providing your feedback.

Will Gordon in reply to Sarah Richards
August 31, 2018 at 7.19 am

When you say “to meet the needs of the majority of our customers,” I think you forget, or refuse to admit, that Gusto was always available to those that needed a more fully featured payroll/HR system.

How are you claiming this to be a good thing for those that didn’t need it?

Sadly, I’ll have to maintain my subscription until after the U.S. tax season. That’s about 8 months before I can fully leave.

Sarah Richards in reply to Will Gordon
August 31, 2018 at 8.25 am

Hi Will – I didn’t mean to make it sound like Gusto wasn’t an option previously, it has been one of our app partners for nearly five years now. I’m sorry that Gusto isn’t for you.

David
August 29, 2018 at 12.09 pm

Not smart, Xero – expenses and payroll in the existing system work for my 4-person shop.

Adding expense and pushing responsibility for these functions outside of your perimeter would seem to warrant some kind of reduction in the base cost of the Xero platform.

What’s your reduced fee for continuing subscribers who weren’t consulted in your research?

Sarah Richards in reply to David
August 30, 2018 at 3.10 am

Hi David – thanks for getting in touch. Our new pricing plans are designed so that businesses can grow with Xero, and we’re confident that they are reflective of the value of our product. For existing Xero Payroll users, we’re offering introductory discounts for Gusto as highlighted above. I know these changes aren’t easy for everyone, but I appreciate you taking the time to provide your feedback.

Chris Galusha
August 29, 2018 at 1.47 pm

Wow! I am out! I joined Xero because it was low cost for a single person business. I can just pay a CPA for what Xero and Gusto are going to cost.

Sarah Richards in reply to Chris Galusha
August 30, 2018 at 3.42 am

Hi Chris – thanks for your comment. I understand that this is a big change, but we would hate to see you go and I have passed your feedback along to our team. Thanks again for getting in touch.

Taylor
August 29, 2018 at 8.16 pm

This is a bad deal for all small business owners who utilized zero. Our pricing just more than tripled. I’ll be looking elsewhere before November.

Sarah Richards in reply to Taylor
August 30, 2018 at 4.05 am

Hi Taylor – thanks for your comment. I understand that this is a big change. It’s not a decision that we made lightly – we truly believe that the new pricing plans reflect the value of not only their features but the experience using them and allow businesses to choose a plan that suits them as they grow. Thank you again for sharing your thoughts.

Zack Hofstad
August 30, 2018 at 2.54 am

Let me get this straight: Xero is dropping its payroll feature, keeping its monthly fee the same, and then bringing on another outfit to handle payroll and allowing its customers to be charged more than double the current monthly fee? What a business model.

I’m a one-employee small business, and I chose Xero because it offered the features I needed at the right price point. Now it appears my cost will more than double for the same features. This seems to be a sweeping-aside of very small businesses like mine. Couldn’t it have been possible to maintain current pricing, or something close to it, for customers that don’t need anything more than what they’re already using? At $75 a month for Xero and Gusto, what’s keeping me from migrating to a new platform?

Sarah Richards in reply to Zack Hofstad
August 30, 2018 at 4.28 am

Hi Zack – thanks for your comment. After determining that the majority of customers were looking for a full-service payroll solution, we had to make the decision to wind down our in-built payroll product. I understand that Xero Payroll was more than sufficient for your needs as a one-employee small business owner such as yourself. I would like to point you to our App Marketplace, where you can find the other payroll App Partners that integrate with Xero if Gusto isn’t right for you. Thank you for providing your thoughts – your feedback is heard.

Jeff N
August 30, 2018 at 3.36 am

Poor choice on Xero’s part. We’ll be leaving. The value proposition of Xero over others is gone. Quickbooks must be salivating at the new business they will be getting.

Sarah Richards in reply to Jeff N
August 30, 2018 at 4.36 am

Hi Jeff – thanks for your comment. We truly believe that our partnership with Gusto will give our US users the best possible experience when it comes to processing payroll. I’m sorry to hear that you’re not happy with the decision – thank you for sharing your feedback with us.

Chad von Nau
August 30, 2018 at 6.36 am

I like Xero Payroll and I urge you to keep it around in some form. Gusto integration is a great idea, for those that need it, but judging by these comments, there are many of us that felt Xero Payroll was a better fit. Your team has built a great product and it would be a shame to scrap it completely. It’d be reasonable to charge an additional fee and/or limit it to your more expensive plans, to support continued maintenance. Please reconsider your plans. Thank you.

Sarah Richards in reply to Chad von Nau
August 30, 2018 at 8.10 am

Hi Chad – thanks for reaching out. We know for many our in-built payroll was a great fit – we appreciate your kind words about it. I will pass your feedback on to the team. Thanks again.

Heather S.
August 30, 2018 at 8.29 am

I really wish we would have known this when we switched from Patriot Software last year, we would have gone with Quickbooks. Just as everyone else is commenting, for two employees this is ridiculous. And submitting your own tax payments for less than 5 employees takes all of about 5 minutes via EFTP. More irritating is that I can’t create a journal entry in Xero to hit checking! So even if I want to go back to using Patriot Systems for our payroll ($10/month), you’ve made it a complete nightmare to try and enter the data. I’m the owner of my own company, but you do not allow me the right to make a journal entry against my checking account??? That’s crazy in itself. Quickbooks is looking better and better.

Sarah Richards in reply to Heather S.
August 31, 2018 at 8.01 am

Hi Heather – thanks for your note. I’m sorry that this is such a big change for you, especially when you not long switched to Xero. There are a few more economical payroll solutions available on our App Marketplace – I hope you’ll consider them. I’m also sorry that it isn’t easier to make a journal entry against your checking account. I’ve been told there is a workaround, which you can find more information on here. I hope this helps. Thanks again for your feedback.

Kyle Weston
August 30, 2018 at 11.31 am

The sad thing is I moved from Gusto to Xero. I can’t stand using Gusto for payroll. I don’t find it intuitive at all. The way they try to “dumb it down” actually makes payroll much more cumbersome I found. Much prefer Wagepoint or Quickbooks or the Xero payroll option that has now been killed.

Bad move on the Xero execs to take away a major feature and yet not discount the price at all – but instead have it cost much more. One of the main reasons our company moved to Xero is for the integrated payroll. Now we have to decide if it is worth it to stay on. So far leaning towards no. And I can tell you there will be many companies that jump ship without even leaving a comment…

Sarah Richards in reply to Kyle Weston
August 30, 2018 at 3.49 pm

Hi Kyle – thanks for your comment. I’m sorry to hear that Gusto wasn’t the right fit for you. We do have other App Partners that provide payroll solutions – you can check them out on the App Marketplace. Thanks again for your feedback.

Ben Richmond
September 1, 2018 at 11.14 am

Thank you for all of your comments. I wanted to take the time to address some of them and start by saying – we understand the impact of this decision for a small group of our customers with smaller payrolls that our in-built US payroll product was working well for. We are proud of the payroll services our Xeros built, but the reality was it didn’t have the features that everyone needed. It wasn’t available in all 50 states and the largest share of our customers were wanting full-service 50-state payroll. These were the main reasons that, after a long period of consideration, we made the hard call to shut our payroll down and form a strategic partnership with Gusto – while still continuing to grow our ecosystem of payroll partners.

We wanted to give you plenty of time to assess Gusto and the other options out there. That’s why we’re committed to keeping Xero Payroll open until the end of the financial year – giving you enough time to complete final tax filing needs. We appreciate that after investigating Gusto and the other ecosystem partners available, you might have to make a decision about Xero and whether it’s the right platform for you moving forward. The team and I will be watching and discussing all the feedback. Please email me at ben.richmond@xero.com if you’d like to chat through it further.

Cheers,
Ben Richmond
VP, Business Growth, Americas

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