Sage vs Xero
Sage starts at £20 a month and Xero at £18, but the entry price is the least useful number here. Sage charges by feature and gives users away; Xero charges by volume and headcount. Which is cheaper depends entirely on which of those you have more of.
Prices checked 10 September 2026 · List prices excluding VAT
Price, side by side #
| Sage plan | A month | What it adds |
|---|---|---|
| Accounting Start | £20.00 | One user, invoicing, VAT returns and MTD |
| Accounting Standard | £43.00 | Unlimited users, quotes, cash flow forecasting |
| Accounting Plus | £59.00 | Adds multi-currency and stock |
| Xero plan | A month | What it adds |
|---|---|---|
| Ignite | £18.00 | Up to 20 invoices and 10 bills a month |
| Grow | £39.00 | Unlimited invoicing, payroll for 1 |
| Comprehensive | £55.00 | Payroll for 5, multi-currency |
| Ultimate | £70.00 | Payroll for 10, project tracking |
A note on sourcing. The Xero figures come from Xero's own pricing page. Sage's pricing page blocks automated requests, so those figures come from secondary reporting and should be confirmed on Sage's own pricing page before you rely on them.
The pricing logic is the real difference #
Comparing plan to plan misleads, because the two vendors charge for different things.
| You pay more when you add | Sage | Xero |
|---|---|---|
| People who log in | No, unlimited from Standard | No, but plans differ by feature |
| Invoices you send | No | Yes, the entry plan is capped |
| Employees on payroll | Payroll is priced separately | Yes, built into the plan tiers |
| Multi-currency and stock | Yes, top plan only | Yes, upper plans |
So a five-person business that sends forty invoices a month and runs no payroll is cheaper on Sage. A one-person company with a handful of invoices is cheaper on Xero. Neither is generally better value; it depends which axis your business grows along.
Where each one wins #
| Sage | Xero |
|---|---|
| Unlimited users from the middle plan | Much larger app marketplace |
| No cap on invoice volume at any tier | Bank feeds and reconciliation are generally slicker |
| Long UK track record and wide accountant familiarity | Cloud-native throughout, no desktop legacy |
| Cash flow forecasting from Standard | Payroll included in plan tiers rather than priced apart |
If you work in construction #
Neither handles the Construction Industry Scheme as standard. Xero offers CIS as an add-on; Sage's handling varies by plan and version. If CIS is central to what you do, that is a reason to look at QuickBooks, which includes it from its cheapest plan.
Whatever you choose, check it handles the VAT domestic reverse charge on invoices, because most construction subcontractors need it and getting the invoice wording wrong is the common failure. The CIS calculator is there for checking a deduction against whatever the software produces.
Which to pick #
- Several people needing access: Sage, from Accounting Standard. Unlimited users is the one genuinely structural difference
- Low invoice volume, one or two people: Xero Ignite, or FreeAgent free with the right bank account
- Payroll for a handful of staff: Xero, where it is bundled into the plan rather than added on
- Construction and CIS: neither, without checking QuickBooks first
- Your accountant has a strong preference: take it. The cost of working against your accountant's platform usually exceeds the price difference
Also worth a look #
This is a three-way market and the third option is often the cheapest. The full price comparison puts all the packages together, and accounting software for sole traders covers the lighter end where neither Sage nor Xero is really aimed.
If invoicing is all you need, the invoicing software comparison covers the free options, and the invoice generator produces a compliant UK invoice without any subscription at all.
Common questions #
Is Sage or Xero cheaper?
On list price Xero starts lower, at £18 a month against £20 for Sage Accounting Start. Higher up the range they converge: Sage Plus is £59 and Xero Ultimate £70. Both discount heavily for the first six months, so compare month seven.
What is the difference between Sage and Xero?
Sage sells unlimited users from its middle plan upward, where Xero prices by invoice volume and payroll headcount instead. Sage is the older, larger UK vendor with deeper desktop heritage; Xero was built cloud-first and has a wider app marketplace.
Does Sage or Xero handle CIS better?
Neither includes full CIS handling as standard. Xero offers it as an add-on. If the Construction Industry Scheme is central to your business, QuickBooks includes it from its cheapest plan and is worth checking before either of these.
Which is better for a sole trader?
Neither, on price. Sage Accounting Start is £20 and Xero Ignite £18 with an invoice cap. FreeAgent is free with a NatWest, RBS, Ulster Bank or Mettle business account, which is hard to beat if you bank with one of those.
Does Sage include unlimited users?
From Accounting Standard at £43 a month, yes. That is the one clear structural advantage over Xero, which charges more as you add payroll employees rather than as you add people who log in.
Are Sage and Xero both MTD compatible?
Yes. Both are recognised by HMRC for Making Tax Digital for VAT and both file VAT returns directly. Neither is a differentiator; treat MTD compatibility as a baseline rather than a feature.
Can I switch from Sage to Xero?
Yes, and conversion services exist for moving historic data. The practical constraint is usually your accountant rather than the software, since most practices standardise on one platform and charge for working outside it.