2026 Xero Pricing Explained: Compare Plans for Sole Traders

Considering Xero for your sole trader business, but not sure which of their many pricing plans is best for you?

You're not alone.

Understanding Xero pricing can be complicated, with regular increases and the recent overhaul of their entire pricing structure making it difficult for many solo operators.

This guide breaks down exactly what each plan includes, what it costs, what to consider when reviewing each plan, and which plans might make sense for your business. 

The following information reflects current Xero pricing and plans as of March 2026. All plans are in AUD and include GST. 

2026 Xero plans and pricing for sole traders at a glance

Note: Xero claims that Comprehensive plans are also built for self-employed Aussies. However, at $100/month, this is out of the budget of most sole traders.

The only additional feature offered that could be useful is multi-currency invoicing, but other accounting apps offer this functionality for sole traders at a fraction of the price. 

For this review, we've focused on Ignite and Grow, as these are the plans that most sole traders will be considering. 

2026 Xero pricing breakdown

Ignite plan: Best for sole traders with limited invoicing and billing needs

Cost: $35/month

This Xero starter plan covers your core small business accounting essentials: quoting, invoicing, bank feeds, GST tracking, BAS lodgement, and basic reporting.

For a sole trader who sends a handful of invoices a month, it can work.

That said, this plan does comes with some tight restrictions that catch a lot of users off guard.

Pros:

• Most affordable Xero plan 

• Online payments for clients

• Bank feeds to automate income and expense tracking

• Receipt capture (via Hubdoc app)

• GST and BAS reporting

• 30-day cash flow forecast

• Payroll for 1 person (useful if you pay yourself as an employee)

• Can use the Xero Accounting app to send invoices and track expenses on the go

• Can connect Xero with +1,000 apps in the Xero App Store

Cons:

• Hard cap of 20 invoices per month (if you use apps like Shopify/Stripe and import sales, these count towards your limit)

• Only 5 bills per month (which is really 4 bills, as your Xero subscription takes up one of your slots)

• Need to use separate app for receipts

• No project or time tracking

• No multi-currency

• Unused invoices or bills don't roll over to the next month

Overall, the strict limits on this plan means many sole traders outgrow it faster than expected. 

Grow plan: Best for most sole traders (who can afford it)

Cost: $75/month

Grow removes invoicing and billing limits entirely and adds expense and mileage tracking for 1 user, meaning you won't have to use a separate app to capture receipts. 

If you're sending more than a few invoices each week and want to keep all your business expenses in one place, Grow is likely your minimum viable plan.

The jump from $35 to $75 is significant (more than double), but you do get more functionality in return.

Pros:

• Unlimited invoices and bills

• Expense and mileage tracking included for 1 user

• Auto bank reconciliation (currently in beta)

• Payroll for 2 people

• Customisable performance dashboards and visualisations

Cons:

• Steep subscription cost for most sole traders 

• No project or time tracking

• No multi-currency 

• Cash flow forecast still only 30 days

For most sole traders in the Xero ecosystem, Grow is the natural next step, though the price increase is a big leap. If you're happy to cough up the extra cash (and want to make sure you have room to grow if you hire in future), it can be a good option. 

Do Xero's Comprehensive and Ultimate plans suit sole traders?

These plans are built for much bigger businesses and not fit for most sole traders. 

While they do offer some useful functionality like multi-currency invoicing and project and time tracking, they also come with many other features you'll never touch. 

With Comprehensive starting at $100/month, this isn't in the budget for most solo operators, so it may be helpful for sole traders to look at alternative solutions at this stage. 

Frequently asked questions about Xero pricing 

Does Xero offer a free trial?

Xero does offer a 30-day free trial, like many accounting software providers. However, they seem to be phasing this out in favour of offering users 1 free month after purchasing a Xero subscription.

While this means you can try Xero without paying, you will need to enter your payment details to do so. This means if you decide it isn't the right fit for your business, you'll need to cancel your subscription before the second month begins or you'll be automatically charged.

Can I pay annually to get a discount?

Currently, Xero only offers monthly pricing. This means you'll have to regularly budget for the subscription cost ($35-$100 per month for most sole traders).

Will Xero be raising its prices in 2026?

Xero's pricing has increased every year since 2021, with the average Australian small business paying roughly $15-$20 more per month vs 5 years ago. 

The most significant change came in July 2024, when Xero restructured its plans and increased prices across almost all tiers, with some sole traders seeing their effective monthly cost more than double.

While we can't say for certain whether more price changes are coming in 2026, Xero's track record makes it a real possibility. It's worth considering that we may see new pricing in the next 12 months. 

Should I take advantage of big discounts on Xero pricing plans?

Xero often offers heavy discounts to encourage users to sign up that may look like big savings on the surface. However, once the promotion ends, you'll be back to paying full price and switching will feel like a hassle. 

When considering the cost of Xero for your business, look at the full month rate rather than the discount, as this is what you'll be paying for most of your time with them.

You'll also want to consider the potential of any future Xero price rises.  

Does Xero have a separate payroll only plan?

Before June 2025, payroll was a standalone add-on. But after feedback that sole traders and small business owners were being priced out of paying themselves, Xero decided to make some changes. 

Now, every Xero plan includes payroll:

• Ignite: Payroll for 1 person

• Grow: Payroll for 2 people

• Comprehensive: Payroll for 5 people

• Ultimate: Payroll for 10-100 people 

For most sole traders, single-person payroll is enough if you pay yourself as an employee.

But if you have even 1 or 2 employees, you'll need Grow as a minimum.

The verdict: Choosing the right plan for your business

• Have fewer than 20 invoices and 5 bills per month? Ignite may be enough, but keep an eye on your usage so you don't get caught out.

• Don't want to worry about limits? You'll need to step up to Grow at $75/month.

• Have international clients? Comprehensive gives you multi-currency capabilities at $100/month (though at that price, it's worth exploring alternatives)

It's worth noting that Xero's plan structure wasn't designed with solo business in mind. 

The gap between Ignite ($35) and Grow ($75) is stark, and frustrates many sole traders who only need slightly more than the entry-level offers.

Ultimately, Xero is built for small to medium-sized businesses, accountants, and bookkeepers. And while sole traders can still use it, you may want to consider looking at other options. 

When Xero is a good fit for sole traders

Xero can be a good fit if you:

• Plan on eventually hiring employees or shifting to a company structure 

• Need to track and manage physical inventory 

• Want to integrate your accounting software with the other tools you use to run your business (e.g. client management software)

When to consider an alternative to Xero accounting software

You might want to start comparing Xero against other solutions if:

• You're a service-based solo business looking for a simple app to help you get paid, keep tabs on money in and out, and take the pain out of tax / BAS

• You want all the tools you need to run your business (and none of the complicated extras like payroll) for less than the cost of Xero's entry-level plan

• You don't plan to hire employees (excluding contractors / subcontractors)

What is the best alternative to Xero in Australia for sole traders?

If Xero's pricing structure or feature complexity isn't a great match for your needs, Rounded is one option worth looking at. 

It's an Australian app built specifically for sole traders and freelancers, which means the feature set and price points are designed with that audience in mind rather than businesses with employees and complex operations

How it compares to Xero for sole traders

• Invoicing. Unlimited invoices on all plans, no monthly caps.

  Templates are fully customisable, so you can edit the design, labels, and branding to perfectly suit your business.

• Built-in time tracking. Xero doesn't include time tracking for sole traders at any price.

  Rounded's time tracker feeds directly into invoicing, so you can track time at your desk or via the mobile app, and bill it with one click. No separate tool needed.

• Multi-currency. Available on any plan. Xero charges over 350% more than for the same feature.

• Simplicity. Rounded is designed around what a sole trader actually needs (invoicing, expenses, time tracking, GST, and BAS) without the complexity of a platform built for teams and larger businesses.

  You also get a visual dashboard that tells you exactly what you need to know (if you're on track to hit your profit goals for the month or year, top clients and services, how much you'll need to put away for tax this year) so you can make confident business decisions. 

• Price. Rounded Pro at $29.95/month costs less than Xero's cheapest plan, and well under half the price of Grow (the plan most sole traders end up on). Over a year, that's at least $500 in savings. 

Why Australian sole traders choose Rounded to run their business

"After trying out a few competitors (including the big one that starts with X) and finding them way too OTT for my needs, I'm so glad I came across Rounded. It's made my finance admin so much easier."

Tess McCabe, Graphic Designer

"I found Xero far too complicated and expensive for more than 5 invoices per week. Rounded has it all for just a small yearly fee: instant help online chat, simple user interface and they take suggestions seriously and update the program as they go."

Sarah Turner, Camera Assistant

 "Just brilliant. Does everything I need as a sole trader. No complicated rubbish, just the important stuff you need to keep your business running. Great support too."

 Leonie Waldron, Chameleon Copywriting & Content Marketing

See if Rounded will suit your solo business

Try Rounded for free today.(No credit card required)