Xero vs Wave Payroll
A head-to-head comparison to help you pick the right tool
Last updated: April 30, 2026
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.
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.
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
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
Xero vs Wave Payroll: Side by Side
| Factor | Xero | Wave Payroll |
|---|---|---|
| User Rating | N/A | N/A |
| Category | Accounting Software | Payroll Software |
| Pricing Model | Paid | Paid |
| Starting Price | $15/mo | $20/mo + $6/person |
| Best For | Small businesses and accountants wanting a clean, modern alternative to QuickBooks | Micro-businesses already using Wave accounting that want simple integrated payroll |
| Our Pick | — | — |
Xero Features
- ✓Bookkeeping
- ✓invoicing
- ✓bank reconciliation
- ✓expense claims
- ✓payroll
- ✓financial reporting
- ✓inventory
- ✓project tracking
- ✓integrations
- ✓mobile app
Wave Payroll Features
- ✓Payroll processing
- ✓direct deposit
- ✓tax payments and filings
- ✓W-2 and 1099 preparation
- ✓Wave accounting integration
- ✓employee self-service
Pricing Comparison
Our Take
Choose Xero if small businesses and accountants wanting a clean, modern alternative to quickbooks. Choose Wave Payroll if micro-businesses already using wave accounting that want simple integrated payroll.
Best For
Small businesses and accountants wanting a clean, modern alternative to QuickBooks
Best For
Micro-businesses already using Wave accounting that want simple integrated payroll
Also Consider
If neither Xero nor Wave Payroll is the right fit, Dext is worth evaluating.
Dext
Bookkeepers, accountants, and businesses with high receipt volumes wanting to eliminate manual data entry
From $15/mo
Frequently Asked Questions
What is the difference between Xero and Wave Payroll?
Xero is best for small businesses and accountants wanting a clean, modern alternative to quickbooks. Wave Payroll is best for micro-businesses already using wave accounting that want simple integrated payroll.
Which is better, Xero or Wave Payroll?
Choose Xero if small businesses and accountants wanting a clean, modern alternative to quickbooks. Choose Wave Payroll if micro-businesses already using wave accounting that want simple integrated payroll.
How much does Xero cost?
Xero starts at $15/mo. Pricing model: Paid.
How much does Wave Payroll cost?
Wave Payroll starts at $20/mo + $6/person. Pricing model: Paid.
Who should use Xero?
Small businesses and accountants wanting a clean, modern alternative to QuickBooks
Who should use Wave Payroll?
Micro-businesses already using Wave accounting that want simple integrated payroll