Wave Payroll vs Xero
A head-to-head comparison to help you pick the right tool
Last updated: April 30, 2026
Wave Payroll
Wave Payroll is a simple payroll solution built into the Wave accounting ecosystem. It is designed for very small businesses that already use Wave for accounting and want an integrated payroll solution. Wave Payroll handles direct deposit, tax payments, and W-2s, making it a natural choice for businesses already in the Wave ecosystem.
Xero
Xero is a cloud-based accounting platform popular with small businesses and accountants worldwide. It is known for its clean interface, strong bank reconciliation tools, and excellent integration ecosystem. Xero is particularly popular in Australia, New Zealand, and the UK, and is considered the main alternative to QuickBooks for cloud-based accounting.
Pros
- ✓Seamlessly integrates with Wave accounting — no manual data transfer needed
- ✓Very affordable pricing for micro-businesses
- ✓Simple interface with minimal setup required
- ✓Free Wave accounting included with subscription
Cons
- ✗Limited features compared to dedicated payroll platforms
- ✗Tax filing is only automatic in select states — manual filing required in others
- ✗No mobile payroll app
- ✗Not suitable for businesses with complex payroll needs
Pros
- ✓Beautiful and intuitive interface — one of the cleanest in accounting software
- ✓Unlimited users on all plans — no per-seat pricing
- ✓Excellent bank reconciliation with smart matching
- ✓Strong ecosystem of 1000+ integrations
Cons
- ✗Payroll requires a separate add-on in most regions
- ✗Inventory management is basic compared to QuickBooks
- ✗Reporting is less comprehensive than QuickBooks on lower tiers
- ✗Customer support is primarily online with no phone support
Wave Payroll vs Xero: Side by Side
| Factor | Wave Payroll | Xero |
|---|---|---|
| User Rating | N/A | N/A |
| Category | Payroll Software | Accounting Software |
| Pricing Model | Paid | Paid |
| Starting Price | $20/mo + $6/person | $15/mo |
| Best For | Micro-businesses already using Wave accounting that want simple integrated payroll | Small businesses and accountants wanting a clean, modern alternative to QuickBooks |
| Our Pick | — | — |
Wave Payroll Features
- ✓Payroll processing
- ✓direct deposit
- ✓tax payments and filings
- ✓W-2 and 1099 preparation
- ✓Wave accounting integration
- ✓employee self-service
Xero Features
- ✓Bookkeeping
- ✓invoicing
- ✓bank reconciliation
- ✓expense claims
- ✓payroll
- ✓financial reporting
- ✓inventory
- ✓project tracking
- ✓integrations
- ✓mobile app
Pricing Comparison
Our Take
Choose Wave Payroll if micro-businesses already using wave accounting that want simple integrated payroll. Choose Xero if small businesses and accountants wanting a clean, modern alternative to quickbooks.
Best For
Micro-businesses already using Wave accounting that want simple integrated payroll
Best For
Small businesses and accountants wanting a clean, modern alternative to QuickBooks
Also Consider
If neither Wave Payroll nor Xero is the right fit, Multiplier is worth evaluating.
Multiplier
Startups and SMBs hiring internationally on a budget
From $40/contractor/mo
Frequently Asked Questions
What is the difference between Wave Payroll and Xero?
Wave Payroll is best for micro-businesses already using wave accounting that want simple integrated payroll. Xero is best for small businesses and accountants wanting a clean, modern alternative to quickbooks.
Which is better, Wave Payroll or Xero?
Choose Wave Payroll if micro-businesses already using wave accounting that want simple integrated payroll. Choose Xero if small businesses and accountants wanting a clean, modern alternative to quickbooks.
How much does Wave Payroll cost?
Wave Payroll starts at $20/mo + $6/person. Pricing model: Paid.
How much does Xero cost?
Xero starts at $15/mo. Pricing model: Paid.
Who should use Wave Payroll?
Micro-businesses already using Wave accounting that want simple integrated payroll
Who should use Xero?
Small businesses and accountants wanting a clean, modern alternative to QuickBooks