Xero vs Sage: Complete Comparison of Features and Fees

Managing finances can be challenging whether you are a small business owner or a freelancer in the UK. This is why many businesses turn to Sage and Xero, two of the most popular accounting tools to send invoices, track expenses, and run payroll efficiently.

In this guide, we’ll walk you through a head‑to‑head comparison of Xero vs Sage, so you have a better sense of which option is the right fit for your business.

We’ll also show you how Wise Business can streamline your admin due to its ability to connect to accounting software such as Xero, which is one of the many features of this all-in-one business account for both domestic and international use.

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Overview

Aspect	Xero	Sage
Pricing range	£7 to £65/month after the discount period¹	£18 to £59/month after the discount period²
Discount	90% off any plan for the first 6 months¹	90% off all plans for the first 6 months²
Integrations	Connects to 21,000+ global institutions⁵ and with Wise Business⁸	Integrates with business bank accounts for a real‑time cash‑flow view¹¹
Core features	Expenses, invoicing, and payroll all on one platform³ Automated invoicing and reporting⁴ Real‑time collaboration with team members and/or your accountant⁶ MTD Income for Tax ready¹	Manage, send, and track sales and purchase invoices⁹ Capture and save receipts in the cloud² HMRC‑recognised and supports Making Tax Digital¹⁰ Connect business bank accounts for a real‑time view of cash flow¹¹ Payroll processing²
Customer’s ratings	4.1 / 5.0 rating on Trustpilot²⁴	3.9 / 5.0 rating on Trustpilot²²

User interface

Xero

Xero’s user interface is simple and user-friendly, making it suitable for accounting professionals, small business owners and freelancers looking for easy-to-use accounting software.

Many user reviews on Trustpilot describe Xero accounting software as easy to navigate and use¹². Another user on the same review site describes Xero’s user interface as intuitive, making day-to-day accounting tasks much easier¹³.

Although many users recommend Xero for its user-friendly interface, some also complain that the Xero Practice Manager (XPM) interface is challenging to use and does not integrate with Xero Payroll¹⁴.

Sage

Sage accounting software also features a clean, user-friendly interface. This means small business owners and freelancers can use this tool even with their limited accounting experience.

Alternatively, based on Trustpilot reviews, multiple users describe Sage’s user interface as old and clunky¹⁵.

Pricing and plans

Xero

Xero has five price plans¹. The ‘Simple’ plan is designed for freelancers, sole traders and landlords¹. It offers quotes, up to 10 invoices and no bills monthly¹.

These limits are lifted if you pay more per month for the ‘Ignite’ and ‘Grow’ plans. If you’d like a full range of features, including accounting in multiple currencies, you can shell out for the ‘Comprehensive or Ultimate’ plans.

Xero offers a 90% discount (at the time of writing) on any plan for the first 6 months¹.

Plan	Standard price after discount	Discounted price (first 6 months)	Who is this plan best suited for?
Simple¹	£7/month¹	£0.70/month (90% off)¹	Non‑VAT businesses such as sole traders and landlords¹
Ignite¹	£16/month¹	£1.60/month (90% off)¹	Small businesses¹
Grow¹	£37/month¹	£3.70/month (90% off)¹	Growing businesses that need more bills, cash‑flow forecasting (30‑day), auto‑reconcile beta, expense/mileage claiming for multiple users, and richer reporting¹
Comprehensive¹	£50/month¹	£5/month (90% off)¹	Businesses that want deeper forecasting (90‑day), more included bill payments, more payroll capacity, and enhanced performance dashboards and analytics¹
Ultimate¹	£65/month¹	£6.50/month (90% off)¹	Larger or more complex small businesses needing 180‑day forecasting, highest included bill‑payment and payroll thresholds, KPI/ratio analysis, and project tracking for up to 10 users¹

Sage

Sage offers a 90% discount on all its plans for 6 months (at the time of writing²). After this time, you’ll pay between £18 and £59 for its plans, which is broadly comparable with Xero².

Plan	Standard price after discount	Discounted price (first 6 months)	Who is this plan best suited for?
Start²	£18/month excl. VAT²	£1.80/month excl. VAT for 6 months (90% off)²	VAT‑registered sole traders or small businesses just getting started²
Standard²	£39/month excl. VAT²	£3.90/month excl. VAT for 6 months (90% off)²	Small businesses working with suppliers, Construction Industry Scheme (CIS), or using accrual accounting²
Plus²	£59/month excl. VAT²	£5.90/month excl. VAT for 6 months (90% off)²	Small businesses managing inventory or operating in multiple currencies²

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Key features

Xero and Sage share many similarities. So you’ll need to look closely at the features available with each plan to find the right solution for your business.

Xero key features

• Expenses, invoicing, and payroll all on one platform³.
• Automated invoicing and reporting⁴.
• Access bank data from 21,000 global institutions⁵.
• Real-time collaboration with team members and/or your accountant⁶.
• Customisation options, including integration with 800+ third-party apps⁷.
• MTD income for Tax ready¹
• Integrates with Wise Business and provides visibility to multi-currency transactions without chasing spreadsheets or exporting endless CSVs⁸.

Sage key features

• Manage, send, and track sales and purchase invoices⁹
• Calculate and submit compliant VAT returns - Sage is HMRC recognised and Making Tax Digital ready¹⁰
• Capture and save receipts in the cloud²
• Share access with your accountant²
• Connect your business bank accounts for a real-time view of cash flow¹¹
• Payroll processing²

Advantages and limitations

Xero advantages

• Clean and intuitive user interface.
• It’s cloud-based, so it's accessible on any internet-enabled device.
• It integrates in real-time with banks and simplifies bank reconciliation.
• It integrates with other accounting software and payment platforms like Stripe, Xero Inventory Plus, Shopify, PayPal, HubSpot CRM, and more.
• It provides a robust reporting and analytics tool that makes it easy to generate financial reports.

Xero limitations

• The Xero Practice Manager is hard to use¹⁴.
• Contacting customer support is a hassle¹⁶. There’s also no phone support.
• Initial setup can be complex, especially if you have no experience with such systems.

Sage advantages

• It has a user-friendly interface and requires a minimal learning curve.
• Supports multi-user collaboration.
• It’s scalable and can accommodate your business's financial needs as it grows.
• It automates routing financial tasks, thereby minimising the need for manual data entry.

Sage limitations

• Unresponsive customer support sometimes¹⁷.
• Logging in or resetting your password can be a hassle¹⁸.
• Getting refunds can take a lot of time¹⁹.
• Recent changes to two‑factor verification have made the app or website difficult to use for some customers²⁰.

The verdict

Sage is one of the UK’s leading providers of integrated accounting software, payroll, and payment systems. Established in 1981, Sage now operates in more than 20 countries²¹. It also has a 3.9/5.0 rating on Trustpilot²².

Sage Accounting is designed for small businesses, with options for everyone from start-ups and sole traders to well-established companies looking to trade internationally.

Xero, on the other hand, was founded in New Zealand in 2006 and has since become one of the leading accounting tools on the market²³.

As of this writing, Xero has approximately 4.6 million subscribers worldwide, with the majority in the UK, New Zealand, and Australia²³. It also has a 4.1/5.0 rating on Trustpilot²⁴.

Xero is all-in-one accounting software designed for new businesses, younger entrepreneurs, and business owners. This makes it ideal for small business owners, freelancers, and solopreneurs.

Connect Xero to Wise Business for seamless multicurrency ecommerce accounting

Xero offers Pay with Wise²⁵, which seamlessly integrates with your Wise Business multi-currency account. That means being able to pay bills from suppliers all over the world in just a few clicks. But that’s not all.

With Wise Business*, you can:

• 🌍 Send money to 140+ countries at the mid-market exchange rate with no hidden fees or sneaky exchange rate markups (product availability varies by region; please check the Wise website for local availability)

• 📥 Receive payments using 8+ local account details for 24 currencies

• 💰 Hold money in 40+ currencies

• ⚡ Use the batch payments tool to create and send up to 1,000 payments in a single transfer

• 👥 Run payroll and make international payments for up to 1,000 employees all over the world

• 💳 Get business debit cards with 0.5% cashback for you and your team to keep track of team expenses and spend all over the world

• 🏢 Manage cash in 55+ currencies across international offices from a single business account and move money between business accounts in seconds (exact speeds can vary depending on individual circumstances and may not be the same for all transactions)

• 🔄 Connect and sync every business transaction to your favourite accounting software, including Xero, Quickbooks, and more

• 🔐 Create your own payment approvals process to manage your team better with customised access for different team members

• 📑 Create custom professional invoices and schedule invoice payments for future dates

• 📈 Earn returns on GBP, USD and EUR with Wise Interest (Capital at risk, growth not guaranteed. Your money is at risk if governments default or interest rates go negative. Visit https://wise.com/gb/interest/ to find out more)

• 🔗 Create payment links and QR codes to get paid easily

• ⚙️ Automate payouts with the Wise API (comes with 24/7 customer support, a sandbox account to test integrations, API tokens, and clear documents on how to implement and make the most of our API)

Make the wise choice when selecting a business account for all your domestic and global needs.

Be Smart, Get Wise.

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*Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

FAQs

Does HMRC recognise Xero?

Yes, HMRC recognises Xero for key UK tax and payroll processes, including Making Tax Digital (MTD) for VAT and Income Tax submissions. Xero is listed among HMRC-recognised software providers²⁶.

Which is more cost‑effective in the long run for small businesses, Xero or Sage?

Xero can be more cost‑effective if you need unlimited users, deeper automation and integrations, because you avoid paying for extra seats as your business grows.

Sources:

1. Pricing Plans | Xero UK
2. Online Store and Ecommerce Accounting Software | Sage UK
3. Get Your Accounting Done with the Xero Accounting App
4. Auto Invoicing Software for Your Small Business | Xero UK
5. Connect Your Bank to Xero: Save Time With Bank Feeds | Xero HK
6. Online Accounting Software for Your Small Business UK | Xero UK
7. App Integrations | Connect Apps for Small Business | Xero UK
8. Wise Business Xero Integration Reviews & Features
9. Invoicing Software for Small Businesses | Sage UK
10. Tax software for Self Assessment and compliance | Sage UK
11. Bank feeds – Xero Central
12. Xero Review - Trustpilot
13. Xero Review - Trustpilot
14. Xero Review - Trustpilot
15. Sage Review - Trustpilot
16. Xero Review - Trustpilot
17. Sage Review - Trustpilot
18. Sage Review - Trustpilot
19. Sage Review - Trustpilot
20. Sage Review - Trustpilot
21. About Us | Sage US
22. Sage Review - Trustpilot
23. About Xero | Xero UK
24. Xero Review - Trustpilot
25. Use Xero Pay with Wise for batch payments
26. Find payroll software that is recognised by HMRC - GOV.UK

Sources last checked on 22nd February 2026