# Xero vs QuickBooks for Contractors: 7 Dealbreakers

> For most US and Canadian contractors who bill in draws, run Housecall Pro or ServiceTitan, or file T5018 slips, QuickBooks Online still wins. Xero wins for contractors with many office logins, simple completion invoices and a Jobber, Buildertrend or ServiceM8 stack: Established is $97 a month from October 2026 against $140 for QuickBooks Plus.

- Canonical URL: https://www.pavadotech.com/blog/xero-vs-quickbooks-for-contractors
- Author: Om Patel
- Published: 2026-09-13
- Topic: Custom CRM

For a US or Canadian contractor, the honest answer to Xero vs QuickBooks comes down to three questions nobody's comparison chart asks. Do you bill in stages? What does your field software sync to? And who keeps your books?

If you bill in draws, run Housecall Pro or ServiceTitan, or have employees in Canada, QuickBooks Online still wins, and it is not close. If you invoice once at completion, have more than five people who need a login, and run Jobber, Buildertrend or ServiceM8, Xero does the same job for roughly two thirds of the price.

The pages ranking for this search get stuck on feature lists. They also quote prices that are years out of date. Method's comparison still lists Xero Early at $15 and QuickBooks Plus at $90, and Contractor Foreman prices Xero at $20 to $80. Neither is what either vendor charges in September 2026. So we checked the live pricing pages, the help centres, and Xero's own public feature request board, which says more about gaps than any sales page.

- **Progress invoicing is the biggest dealbreaker.** QuickBooks Online splits one accepted estimate into multiple invoices on every plan. Xero has no native equivalent, and the request has 250 votes on its ideas forum.
- **Neither does retainage natively.** Both need a negative line item and a balance sheet account. Xero says a retention feature is not planned.
- **Xero is cheaper, more so with more users.** $97 a month for Xero Established from October 1, 2026 against $140 for QuickBooks Plus (five users) or $340 for Advanced (25 users).
- **Check your field app first.** Housecall Pro lists QuickBooks only, and ServiceTitan's Xero integration is in Private Preview for specific accounts.
- **Canada tilts hard to QuickBooks.** Xero has no Canadian payroll and marked it Not planned. QuickBooks Online tracks T5018 suppliers and exports the XML for CRA filing.
- **Xero caps you at two tracking categories.** A 246-vote request to raise that has no committed date.
- **Your bookkeeper's fluency matters more than either logo.** One US CPA says over 90% of clients are on QuickBooks; outside North America the pattern flips.

## What each one costs in September 2026

Xero is cheaper at every comparable tier, and it charges nothing per user. QuickBooks prices by user count, which is where contractors with project managers get caught.

Here are the US list prices from each vendor's pricing page as of this week. Both are running steep introductory discounts (Xero 90% off for six months, QuickBooks 50% off for three), so ignore the promo and budget on the number underneath.

| Plan | Monthly list price (USD) | Users | What matters for a contractor |
| --- | --- | --- | --- |
| Xero Early | $25, rising to $27 on Oct 1 | Unlimited | Only 20 invoices and 5 bills a month |
| Xero Growing | $55, rising to $59 | Unlimited | No invoice or bill caps, but no Projects |
| Xero Established | $90, rising to $97 | Unlimited | Projects (time and cost tracking), expense and mileage claims, multi-currency |
| QuickBooks Simple Start | $38 | 1 | Progress invoicing, basic reports |
| QuickBooks Essentials | $85 | 3 | Adds employee time on invoices |
| QuickBooks Plus | $140 | 5 | Project profitability, 40 classes and locations, inventory |
| QuickBooks Advanced | $340 | 25 | Construction financials, advanced project financials, free 1099 e-filing with Bill Pay Elite |

Sources: [Xero US pricing](https://www.xero.com/us/pricing-plans/), [Xero's October 2026 price update](https://www.xero.com/us/pricing-plans/update/) and [QuickBooks Online pricing](https://quickbooks.intuit.com/pricing/). Both let you invite an outside accountant free: two accountant seats on QuickBooks Plus, three on Advanced.

Two things to notice. First, QuickBooks Plus now lists at $140. When we covered the [2026 QuickBooks price increase](https://www.pavadotech.com/blog/quickbooks-price-increase-2026), reported list pricing for Plus was around $115. Alter Accounting's June 2026 comparison still says "around $115." Second, Xero's increase is smaller in dollars: $2, $4 and $7 a month, effective for new and existing US subscribers on October 1, and the multi-organisation discount starts being phased out the same day.

Canada is priced differently, and the gap narrows:

| Plan | Monthly list price (CAD) |
| --- | --- |
| Xero Starter / Standard / Premium | $25 / $60 / $80, with project tracking an optional add-on from $10 a month |
| QuickBooks EasyStart / Essentials / Plus / Advanced | $30 / $70 / $110 / $220 |

Sources: [Xero Canada pricing](https://www.xero.com/ca/pricing-plans/) and [QuickBooks Canada pricing](https://quickbooks.intuit.com/ca/pricing/). In Canada, Xero sells project tracking as a usage add-on on every plan rather than locking it to the top tier, so a Canadian contractor can run Standard plus Projects for roughly $70 against $110 for QuickBooks Plus.

### A worked example: a 10-person US remodeler

Say you run a remodeling company with four office logins (you, an office manager and two project managers) and six hourly field employees on payroll.

- **Xero:** Established at $97, plus Xero Payroll powered by Gusto at $36 a month and $6 per person. That is $97 + $36 + (6 × $6) = **$169 a month, or $2,028 a year.**
- **QuickBooks:** [Intuit's payroll page](https://quickbooks.intuit.com/payroll/pricing/) bundles Plus with Workforce Premium at $203 a month plus $10 per employee. That is $203 + (6 × $10) = **$263 a month, or $3,156 a year.**

The gap is $1,128 a year. It is not apples to apples, because Intuit's Workforce Premium bundle includes HR and time features, so compare the payroll feature lists too. Now hire two more project managers. You have six office users, QuickBooks Plus stops at five, and Advanced is $340 a month before payroll, or $4,080 a year. Xero's bill does not move.

That is the case for Xero in one paragraph. The rest of this article is the case against it, because price is the only test Xero clearly wins for a North American contractor.

## Dealbreaker 1: do you bill in stages?

If you send more than one invoice against a single contract, QuickBooks Online handles it natively and Xero does not. For a remodeler, a builder or anyone taking deposits on installs, this one test often settles the whole decision.

In QuickBooks Online you turn on "Create multiple partial invoices from a single estimate" under Settings, Sales. You then invoice lines from an accepted estimate as work progresses. QuickBooks tracks what is left, stops you invoicing more than 100% of the estimate, and marks the estimate Converted when it is fully billed. According to [Intuit's progress invoicing help article](https://quickbooks.intuit.com/learn-support/en-us/help-article/invoicing/set-send-progress-invoices-quickbooks-online/L0Ymm6WjR_US_en_US), this is available on every plan down to Simple Start.

Xero has no equivalent. The feature request to [issue progress payments on quotes and invoices](https://productideas.xero.com/forums/967115-invoices-quotes/suggestions/44960395-sales-invoices-issue-progress-payments-on-invoic) sits at 250 votes. Xero's team replied that accepting a deposit on an invoice is now live for organisations that use Stripe in the US, Canada and four other markets, and then added, "We know this doesn't yet cover fuller progress-payment and instalment workflows." A separate request to [convert a quote into a deposit invoice and a remaining-balance invoice](https://productideas.xero.com/forums/967115-invoices-quotes/suggestions/44960839-quotes-convert-to-a-deposit-invoice-and-remainin) got an even plainer answer: it "isn't in the roadmap as yet."

The comments on those threads read like a contractor's inbox. One commenter said their terms are "30% deposity, 30% at installation and 40% at completion." Another, a bookkeeper setting up a client on Xero Projects, said overriding the final invoice made "the project profitability summary then displays incorrectly."

Here is what that costs in practice. Take a $48,000 kitchen on a 30/30/40 draw schedule:

1. **QuickBooks:** one estimate, three progress invoices of $14,400, $14,400 and $19,200. The estimate shows what remains to bill at every stage.
2. **Xero:** three unrelated invoices. The usual workaround, suggested on the same forum, is to keep a draft invoice with the full amount and copy it for each payment. Nothing links the three back to the quote, so "how much is left to bill on the Hendersons' kitchen" is a question you answer with a calculator.

Across ten open jobs that is a spreadsheet, and a spreadsheet is where missed draws hide.

## Dealbreaker 2: do your customers hold retainage?

Neither product does retainage natively, so do not let either sales page convince you otherwise. The difference is in how honest each vendor is about it.

In both ledgers the working method is identical: add a negative line on the invoice for the holdback, code it to a retainage receivable account on the balance sheet, and raise a new invoice for that balance when it is released. Xero's own team recommended exactly this on the [retention feature request](https://productideas.xero.com/forums/967115-invoices-quotes/suggestions/45636571-sales-invoices-ability-to-specify-a-of-invoice), which has 59 votes, then said a retention feature "isn't something we have planned for development at this time."

The comments explain why the workaround hurts. One bookkeeper said it forces clients to create "a separate retentions receivable account for each of their customers," because retention can only be reconciled against statements project by project. Another said 99% of their clients hold retention on commercial projects. A UK commenter pointed out that the negative line breaks the CIS deduction calculation, which is a UK issue, but it shows how brittle the workaround is once tax rules interact with it.

The arithmetic matters more than the workflow. A commercial electrical sub billing $120,000 on a tenant improvement at 10% retainage has $12,000 sitting in a balance sheet account, released months after substantial completion. Multiply by eight concurrent jobs and you have close to six figures of receivables that neither product will remind you about. Xero adds one more wrinkle: tracking categories [do not apply to balance sheet accounts](https://www.ledgerlogic.ca/blog/xero-tracking-categories-guide) in standard reports, so you cannot simply tag retainage receivable by job and run a report.

If that describes most of your work, the ledger is the wrong place to solve it in either product. You want a job layer that produces pay applications and tracks retainage by contract, feeding QuickBooks or Xero underneath. How to keep that visible in QuickBooks is covered in our guide to [tracking WIP in QuickBooks](https://www.pavadotech.com/blog/how-to-track-wip-in-quickbooks).

## Dealbreaker 3: how many ways do you slice job cost?

Xero's job costing is simpler, and simpler is a real advantage if you only cost by job. QuickBooks goes deeper, which matters once you cost by job and division and crew at the same time.

Xero gives you two tools: Projects, for time and costs against a job, and tracking categories, for everything else. The limit is structural. You get [two active tracking categories, with up to 100 options in each](https://www.ledgerlogic.ca/blog/xero-tracking-categories-guide). The request to [raise that limit](https://productideas.xero.com/forums/967124-projects-tracking/suggestions/50517771-tracking-categories-increase-maximum-number-of-a) has 246 votes, and Xero's reply is that it is "exploring" the problem but "can't commit to developments at this stage." A commenter on that thread noted it had been almost a year since Xero's last update.

For a contractor, two categories fill up fast. An electrical contractor might want to cost by job (Projects covers that), by division (service versus new construction), by crew or branch, and by phase (rough-in versus trim). That is three dimensions beyond the job, and Xero holds two.

QuickBooks Plus gives you projects plus classes and locations, capped at 40 on Plus and unlimited on Advanced. Remember the US tier lock, too: Xero only includes Projects on Established. On Early or Growing you are costing jobs with tracking categories alone.

The contractors themselves are split, and both sides have a point. On r/Contractor, one contractor said [Xero's job costing "works quite a bit simpler for me"](https://reddit.com/r/Contractor/comments/1rooj5g/is_quickbooks_job_costing_worth_it_for_a_small/o9ffpku/) and that their accountant explained it a couple of times before they were off and running. On r/Bookkeeping, a bookkeeper warned the opposite: [Xero "is not better if you're planning to job cost your work,"](https://reddit.com/r/Bookkeeping/comments/1ctb852/qbo_v_xero_question/) adding that a simple residential company is fine but municipal construction with full allocations is not, because "Class and cost are NOT the same."

The same r/Contractor thread holds the point that matters more than the software. A contractor who ran QuickBooks Plus job costing for 18 months on residential remodels described budgeting 120 labor hours on a bathroom and finding the crew at 155 before anyone noticed, on a $45,000 job. Their verdict was that the real trigger to upgrade is fixed-price work, not the software tier. Another said Plus only became useful once the crew clocked in against jobs on their phones, because "better reports on bad data isn't that helpful."

Both ledgers produce garbage job costs from garbage time data. If you go with QuickBooks, our [QuickBooks Online job costing setup guide](https://www.pavadotech.com/blog/how-to-set-up-job-costing-in-quickbooks-online) covers the structure.

## Dealbreaker 4: what does your field software sync to?

For a service contractor, this test often overrides all the others, because your field platform creates the invoices and the ledger only receives them. Check your field app's integration page before you look at a single accounting feature.

| Field software | QuickBooks Online | Xero | The catch |
| --- | --- | --- | --- |
| Housecall Pro | Yes | No native integration | Its [integrations page](https://www.housecallpro.com/integrations/) lists QuickBooks; Xero only via Zapier |
| ServiceTitan | Yes | Limited | Listed as supported, but its [Xero help page](https://help.servicetitan.com/docs/xero-1) says "Private Preview and available for specific accounts" |
| Jobber | Yes | Yes | Xero sync is [one way, Jobber into Xero](https://help.getjobber.com/hc/en-us/articles/24609570718359-Jobber-and-Xero-Integration), on Connect and Grow plans |
| JobTread | Native | Via partners | [Xero connects through BuildZilla or Dapt](https://www.jobtread.com/integrations/xero), each supporting its own integration |
| Buildertrend | Yes | Yes | [Works with all Buildertrend plans](https://buildertrend.com/integration/xero/), two-way for certain data |
| ServiceM8 | Yes | Yes | [Both supported worldwide](https://support.servicem8.com/help-center/servicem8-add-ons/faq/which-accounting-packages-does-servicem8-connect-to) |

ServiceTitan's [accounting integrations overview](https://help.servicetitan.com/docs/accounting-integrations-overview) lists Xero next to QuickBooks as if they were equal. They are not. A Private Preview limited to specific accounts is not something to migrate a 20-truck HVAC company onto.

The Jobber detail matters for Xero buyers too. Jobber treats itself as the source of truth, so edits made in Xero do not flow back. Invoices with negative totals do not sync, overpayments beyond the invoice balance do not sync, and tips arrive as invoice amounts you reconcile by hand. None of that is a dealbreaker. It does mean your bookkeeper learns to fix things in Jobber, not in Xero.

If you are still choosing the field platform itself, the [Jobber vs Housecall Pro comparison](https://www.pavadotech.com/blog/jobber-vs-housecall-pro) goes deeper on that side. And if your problem is the handoff between office, field and books rather than either product, that is the gap a [custom CRM built around your workflow](https://www.pavadotech.com/crm) is meant to close.

Most contractors who come to us are not really choosing a ledger. They are trying to stop retyping jobs, draws and change orders between three systems. We map your quote-to-cash flow and build the operations layer that feeds whichever books your accountant already closes.

## Dealbreaker 5: which country, and who runs payroll?

In the US the two are now close on payroll. In Canada QuickBooks is clearly ahead, and for a Canadian contractor with employees and subcontractors it is close to decisive.

**United States.** Xero announced [Xero Payroll, powered by Gusto](https://www.cpapracticeadvisor.com/2026/08/19/xero-sees-strong-growth-in-u-s-and-announces-new-payments-capabilities-and-embedded-payroll-with-gusto/188784/) at Xerocon in August 2026. It includes unlimited payroll runs, automated federal, state and local tax filings, direct deposit and payments to both employees and contractors. Xero's pricing page lists it at $36 a month plus $6 per employee or contractor, and W-9 and 1099 management is included on every Xero US plan. On the QuickBooks side, the Advanced plan lists free 1099 e-filing with Bill Pay Elite. For a US contractor paying subs, both now cover the basics. Xero's version is the newer one, so ask how many pay runs your bookkeeper has actually processed on it.

**Canada.** Xero has no native Canadian payroll. The request for one was [moved to Not planned](https://productideas.xero.com/forums/967118-payroll-expenses/suggestions/45510076-global-payroll-dedicated-xero-payroll-product-fo), and Xero's old Global Pay Run went read-only in July 2025, with retirement after April 2026. Xero's answer is partners, and in July 2026 it [deepened its Wagepoint integration](https://blog.xero.com/product-updates/xero-wagepoint-integration/) with single sign-on and automatic payroll journals. It works, but it is two subscriptions. As one commenter who manages client books put it on the Xero forum, the lack of Canadian payroll is "one of the primary reasons we haven't transitioned all our clients to Xero."

Then there is the T5018. The CRA requires contract payment reporting when [more than 50% of a business's income-earning activity is construction](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/completing-filing-information-returns/t5018-slip-statement-contract-payments.html), and its list of construction activities includes air conditioning, electrical, plumbing, roofing, fencing, painting and drywalling. That covers most trades reading this.

QuickBooks Online Canada has a T5018 workflow built in. You flag suppliers for T5018 tracking, can batch-select existing suppliers, and [download an XML file to e-file through the CRA portal](https://quickbooks.intuit.com/learn-support/en-ca/help-article/accounting-bookkeeping/using-t4a-t5018-forms-quickbooks-online/L4rkycJQS_CA_en_CA). We could not find an equivalent in Xero Canada. The closest thing on Xero's forum is a request for a basic [T4A contractor report](https://productideas.xero.com/forums/967130-contacts-files/suggestions/51119122-t4a-reporting) that combines amounts paid with contact details, which is still at Gaining Support with four votes. For a Canadian GC paying twenty subs, that is a June afternoon of report-building in Xero that QuickBooks does for you.

**UK, Australia and New Zealand.** Flip everything. Of Xero's 4.92 million customers at the end of March 2026, [2.8 million were in Australia and New Zealand](https://www.listcorp.com/asx/xro/xero-limited/news/fy26-annual-results-market-release-3352616.html), and UK revenue grew 26%. The trade apps, the bookkeepers and the accountants there are built around Xero. One accountant on r/AusFinance said [they know accountants who "simply won't work with business owners if they don't use Xero."](https://reddit.com/r/AusFinance/comments/r3qcso/new_small_business_quickbooks_or_xero/) Most of the "Xero is better" praise you read online comes from those markets, so check where a reviewer is before you trust their verdict.

## Dealbreaker 6: who is actually going to keep the books?

In North America, the software your bookkeeper closes fastest usually beats the software with the better feature list. Contractors underrate this test the most.

The evidence is contradictory, and that is useful in itself. In a busy August 2026 thread on r/QuickBooks asking whether a new company should still start on QuickBooks, a CPA wrote that [over 90% of their clients use QuickBooks](https://reddit.com/r/QuickBooks/comments/1vpxqyd/would_you_recommend_a_startup_to_start_using/p414w1s/), and that if you pick another brand you "may not be able to find a CPA or Bookkeeper who will work with you." In the same thread, another practitioner said [25 to 35% of their clients no longer use QuickBooks](https://reddit.com/r/QuickBooks/comments/1vpxqyd/would_you_recommend_a_startup_to_start_using/p41adxv/), and a bookkeeper said most of their clients are on QuickBooks but they are "seeing more prospective clients in Xero."

On r/Bookkeeping, a bookkeeper called Xero "the number one platform outside of the US" and said their firm only uses QuickBooks [because clients arrive already set up on it](https://reddit.com/r/Bookkeeping/comments/1ctb852/qbo_v_xero_question/l4bnw1a/). A different bookkeeper in the same thread, a daily user of both, said QuickBooks Plus "does the Profit and Loss reports better than Xero" and that QuickBooks has better support: "I can phone QBO and talk to a human!"

Xero's own numbers show why this is shifting. Its FY26 results reported 110,000 new US customers, a figure that includes customers from its Melio payments acquisition. That is momentum, but it is still small next to the size of the US QuickBooks base that CPA described.

The practical test takes one phone call. Ask your bookkeeper or CPA three things: which platform they close a month in fastest, how many construction clients they run on each, and whether they have set up progress billing or retainage in Xero before. If the answers are "QuickBooks," "mostly QuickBooks" and "no," the Xero saving goes to paying them to learn it.

## Dealbreaker 7: what does switching actually cost you?

A switch costs far more in time than either subscription, so only move for a problem you can name. If you are on QuickBooks Desktop, the calculation is different, because you are migrating somewhere regardless.

The migration workload is the same in either direction: chart of accounts, open invoices and bills, customers and suppliers, a year of history for comparisons, and every integration reconnected. On r/Bookkeeping, a small construction and remediation company that was moving to Xero after parting ways with a bookkeeper they had been [paying $1,500 a month](https://reddit.com/r/Bookkeeping/comments/1tiyqum/downloading_qbo_data_advice_needed/) listed what they were exporting from QuickBooks before cancelling: balance sheets, P&Ls, trial balances, general ledgers, journal reports, AR and AP aging, bank reconciliation reports, the audit log and the chart of accounts. That is the right list, and it is a weekend on its own.

Also watch for features that move tiers. One construction owner on r/Bookkeeping was running Xero's employee expense feature to reimburse personal-card spending. On today's US price list, that feature sits on Established only. Price out the tier that actually contains the features you use, not the tier you are on today.

If you are coming off Desktop, read [what to do now that QuickBooks Desktop is being discontinued](https://www.pavadotech.com/blog/quickbooks-desktop-discontinued-what-to-do) first, and work through the [QuickBooks migration checklist](https://www.pavadotech.com/blog/migrating-off-quickbooks-checklist) whichever ledger you land on. If you are weighing Sage as a third option, that trade-off is in [QuickBooks vs Sage for contractors](https://www.pavadotech.com/blog/quickbooks-vs-sage-for-contractors).

Do not switch ledgers to fix a scheduling, estimating or follow-up problem. Neither Xero nor QuickBooks schedules crews, builds proposals or chases unsigned quotes. If that is the real pain, the [QuickBooks alternatives guide](https://www.pavadotech.com/blog/quickbooks-alternatives-for-contractors) splits the decision between replacing accounting and adding an operations layer.

## The decision table, by contractor type

Find the row closest to your business. Where two rows apply, the one higher up the table is usually the stronger constraint.

| Your business | Pick | Why |
| --- | --- | --- |
| Canadian contractor with employees and subs | QuickBooks Online | Built-in Canadian payroll, T5018 tracking and XML export. Xero has neither |
| Commercial sub with retainage and pay applications | QuickBooks plus a job layer | Neither does retainage natively; QuickBooks has the wider construction app support |
| Remodeler or builder billing in draws | QuickBooks Online Plus | Native progress invoicing from estimates. Xero's request is at 250 votes and unbuilt |
| HVAC, plumbing or electrical shop on ServiceTitan | QuickBooks Online | ServiceTitan's Xero integration is in Private Preview for specific accounts |
| Any trade on Housecall Pro | QuickBooks Online | Housecall Pro lists QuickBooks, not Xero |
| Service trade on Jobber or ServiceM8, invoiced at completion | Xero Growing or Established | Direct sync, no draws to manage, $59 to $97 a month |
| Builder on Buildertrend with a Xero-fluent bookkeeper | Xero Established | Buildertrend syncs with Xero on all plans; saves $43+ a month over Plus |
| Six or more office and PM logins, simple billing | Xero Established | No per-user fees; QuickBooks Plus stops at five users |
| Tradie in the UK, Australia or New Zealand | Xero | The accountants, apps and payroll ecosystem there are built around it |
| Solo operator sending 20+ invoices a month | QuickBooks Simple Start or Xero Growing | Xero Early caps you at 20 invoices and 5 bills |

## A 10-minute checklist before you commit

Run these in order. The first "no" usually makes the decision for you.

1. **Pull your last three contracts.** If any billed in more than one invoice, test progress invoicing in a trial of both before anything else.
2. **Add up retainage currently held.** If it is more than one job's worth, budget for a job layer whichever ledger you pick.
3. **Open your field software's integration page.** Confirm the Xero integration is native, generally available and on your plan tier.
4. **Count logins, not people.** Owner, office, project managers, estimators. Five or fewer keeps QuickBooks Plus viable.
5. **List every dimension you report on.** If it is job plus more than two others, Xero's two tracking categories will pinch.
6. **Canada only:** confirm how you will produce T5018 slips and run payroll before you sign up for Xero.
7. **Call your bookkeeper.** Ask which platform they close fastest and whether they have set up construction billing in Xero before.
8. **Price the real tier.** Use the post-October 1 Xero price and the QuickBooks list price, not the introductory offer, and include payroll.

For most North American contractors this list ends at QuickBooks Online. That is not because it is a better product in every respect. It is because draws, field software and Canadian compliance are exactly the areas where Xero is weakest, and they are the areas contractors cannot work around cheaply. If none of those apply to you, Xero is the easier, cheaper ledger, and you would be right to take the saving.

## FAQ

### Is Xero or QuickBooks better for contractors?

It depends on how you bill and what your field software syncs to. QuickBooks Online is better if you invoice in stages, run Housecall Pro or ServiceTitan, or operate in Canada with employees, because it has native progress invoicing, the widest field software support and built-in Canadian payroll and T5018 tracking. Xero is better if you need many office logins, invoice once at completion and use Jobber, Buildertrend or ServiceM8, because it has no per-user fees and costs less.

### Can Xero do progress invoicing for construction jobs?

Not natively. A request to issue progress payments against a quote or invoice has 250 votes on Xero's own ideas forum, and Xero's team replied that deposits on invoices are live for Stripe users but that this does not yet cover fuller progress-payment workflows. Contractors work around it by copying a draft invoice for each stage or by using a quoting app such as Quotient. QuickBooks Online creates multiple partial invoices from one accepted estimate on every plan.

### Does QuickBooks Online or Xero handle retainage?

Neither has a native retainage feature. In both, the standard workaround is a negative line item on the invoice coded to a retainage receivable account on the balance sheet, then a separate invoice when the holdback is released. Xero has said a retention feature is not planned for development at this time. If most of your jobs carry retainage, plan on a construction job layer on top of either ledger.

### Is Xero cheaper than QuickBooks for a contractor?

Yes at list price, and the gap widens as you add logins. From October 1, 2026 Xero US costs $27, $59 or $97 a month with no per-user fees. QuickBooks Online lists $38 for one user, $85 for three, $140 for five and $340 for 25. A contractor with six office users would need QuickBooks Advanced at $340 against $97 for Xero Established.

### Does Xero have payroll for contractors?

In the US, yes. Xero announced Xero Payroll, powered by Gusto, in August 2026, and its pricing page lists it at $36 a month plus $6 per employee or contractor. In Canada, no. Xero moved the request for a Canadian payroll product to Not planned and points users to app partners such as Wagepoint instead.

### Does Housecall Pro or ServiceTitan work with Xero?

Not in the way most contractors need. Housecall Pro's integrations page lists QuickBooks, and Xero connects only through Zapier-style automation. ServiceTitan lists Xero as a supported accounting integration, but its own Xero help page says the integration is in Private Preview and available for specific accounts. Jobber, Buildertrend and ServiceM8 all connect to Xero directly.

### Can you do job costing in Xero?

Yes, through Xero Projects plus tracking categories, and some contractors find it simpler to learn. The limits are structural: Xero allows two active tracking categories with up to 100 options each, and in the US Projects is only included on the Established plan. QuickBooks Online Plus gives you projects plus up to 40 classes and locations, which suits contractors who cost by division, crew or phase.

### Will my accountant work with Xero?

Ask before you switch, because in the US it varies sharply by firm. One CPA on r/QuickBooks said over 90% of their clients use QuickBooks, while another practitioner in the same thread said 25 to 35% of their clients no longer do. Outside North America Xero is the default: 2.8 million of its 4.92 million customers are in Australia and New Zealand.