If your business is small enough to sit under Zoho's revenue threshold for its free plan, or you already run other Zoho apps, pick Zoho Books: its free plan already tracks contractors and files 1099s, and its paid ladder adds bank feeds, multi-currency, inventory and project profitability as you climb, with payroll sold as a separate Zoho product. Pick Xero if several people need to be in the books, because every plan has unlimited users with no per-user fee, or if you want payroll run from inside the ledger through its Gusto-powered add-on. Both bill monthly with no contract, both track sales tax and both manage W-9s and 1099s, so the choice comes down to users, which rung holds your features and where payroll lives.
Plans and pricing checked October 2026, and every figure below is read live from our pricing database, the same data as the table and calculator above.
Xero vs Zoho Books pricing: a short ladder against a long one
Xero sells Early, Growing and Established, and bills all of them monthly with no contract. Its entry plan is $27/mo (Early), its mid plan $59/mo (Growing) and its top plan $97/mo (Established). Every plan comes with unlimited users and no per-user fee. The entry plan caps how many invoices and bills you can raise in a month and the mid plan removes those caps, so a busy business climbs a rung sooner than the headline suggests.
Zoho Books runs a longer ladder: a free plan, then Standard, Professional, Premium, Elite and Ultimate, also billed monthly with no contract. Zoho publishes two prices for each paid plan, the monthly rate and a lower rate if you pay for the year up front, and the figures in our table are the annual-billed ones. Read them that way: the entry plan at $15/mo (Standard, annual), the mid plan at $40/mo (Professional, annual) and the top plan at $240/mo (Ultimate, annual) are what you pay per month when you commit to a year, and Zoho's month-to-month rate is higher than the figure shown. Extra users beyond a plan's allowance are charged on top.
The two ladders do not line up rung for rung: Xero's are separated by invoice caps and the features reserved for its top plan, Zoho's by user allowances and the features that arrive at Professional. Compare the plan on each ladder that holds what you need, then let the calculator above fold your invoices, users and employees into one estimated monthly figure for each.
- Invoicing: Xero 20/mo (Early), Zoho Books Yes (annual caps)
- Free tier: Xero No, Zoho Books Yes (under revenue cap)
What does Zoho Books' free plan actually include?
The free plan is for the owner and their accountant, and only while the business sits under a revenue threshold Zoho publishes. Within that limit it is a working ledger: invoicing, bookkeeping, W-9 management, 1099 contractor tracking, and, in Zoho's own words, preparing and filing 1099s, which is unusual on a plan with no price attached. What it leaves out matters as much: bank feeds, sales and use tax tracking, e-filing of the 1099-MISC and 1099-NEC, API access and seats for a small team are all listed from Standard, so a free-plan business keys its bank transactions in by hand. Xero has no free plan.
- Bank feeds: Xero Yes, Zoho Books Yes (Standard)
- API access: Xero Yes, Zoho Books Yes (Standard)
Users: unlimited on Xero, capped and charged per seat on Zoho Books
Xero includes unlimited users on every plan with no per-user fee, so your bookkeeper, accountant and whoever raises the invoices all sign in at the plan price. Zoho Books caps users by plan, the owner plus accountant access on the free plan, a small team on Standard and more on the higher rungs, and charges for each extra user beyond the allowance. Where several people touch the books, put that headcount into the calculator first: it moves Zoho's estimate and leaves Xero's where it was.
- Users included: Xero Unlimited, Zoho Books 3 (Standard)
- Accountant access: Xero Yes (free), Zoho Books Yes (free)
Xero vs Zoho Books payroll: inside the app or a separate product
Xero sells payroll as a paid add-on and Zoho sells it as a separate product. Xero's add-on is optional on every plan, sold as Xero Payroll and powered by Gusto, so you set up and run pay from inside Xero and the add-on is charged on top of your plan; the calculator above applies your employee count to it. Zoho's payroll is Zoho Payroll, a separate Zoho product with its own subscription that connects to Zoho Books rather than running inside it, and our calculator does not cost it, so price it on Zoho's site alongside the Books plan you would choose.
- Payroll: Xero $36/mo + $6/emp, Zoho Books Separate (Zoho Payroll)
Sales tax, W-9s and 1099s
Xero includes sales tax and W-9 and 1099 management on every plan and handles multi-state sales tax through Avalara. Zoho Books tracks 1099 contractors from the free plan up and adds sales and use tax tracking on Standard. A business selling into several states should check the multi-state row on both before choosing a rung.
- Sales tax: Xero Yes, Zoho Books Yes
- Multi-state tax: Xero Yes, Zoho Books Yes (Professional)
- 1099 contractors: Xero Yes, Zoho Books Yes
Multi-currency, inventory and projects: which rung unlocks them
Xero keeps multi-currency and project time and cost tracking for Established, its top plan, while basic inventory is in every plan and a fuller Inventory Plus add-on is sold separately. Zoho Books brings multi-currency, project profitability with timesheets, inventory and purchase orders in at Professional, its mid plan, with Premium, Elite and Ultimate above it. Price the rung that holds what you need, on both ladders, rather than the entry plan.
- Multi-currency: Xero Yes (Established), Zoho Books Yes (Professional)
- Inventory: Xero Limited, Zoho Books Yes (Professional)
- Project tracking: Xero Yes (Established), Zoho Books Yes (Professional)
Support and AI assistants
Xero's support is online around the clock, with a product specialist walking you through setup at no charge when you start. Zoho Books offers email support on its free plan, with voice and chat added from Standard. Both ship a native AI assistant and both publish an official Model Context Protocol server, so on today's data neither has an edge on the agent route.
- Support: Xero 24/7 online, Zoho Books Email / voice / chat
- In-product AI: Xero Native (JAX), Zoho Books Native (Zia)
- Agent route: Xero Native MCP (official), Zoho Books Native MCP (Zoho, official)
Pros and cons for this matchup
Zoho Books wins on a free plan that already files 1099s, multi-currency, inventory and project profitability from its mid plan, and a place inside the wider Zoho suite. Its costs are a free plan with no bank feeds or API, users capped by plan with extra seats charged on top, payroll sold as a separate product our calculator does not cost, and table figures that are the annual-billed rate, so month-to-month billing costs more.
Xero wins on unlimited users on every plan, payroll run from inside the app through its Gusto-powered add-on, and round-the-clock online support. Its costs are no free plan, the invoice and bill caps on its entry plan, and multi-currency and project tracking held back for the top plan. Native AI and an official MCP server are a draw.
The verdict
For a very small business under Zoho's revenue threshold, Zoho Books is the pick: a ledger that tracks contractors and files 1099s for nothing, with a paid ladder to grow into when bank feeds and a second seat become necessary. It is also the pick for a business already running Zoho's other apps that is content to buy payroll as a second Zoho product. Xero is the pick when several people need to be in the books, because unlimited users takes the per-seat line out of the bill, or when you want payroll run from inside the ledger and costed in the same estimate. Run your invoices, users and employees through the calculator above and watch which estimate moves when you add a user: that is the difference this matchup turns on.