Hnry vs Xero for sole traders: a fair comparison

What each one is

Hnry is a registered tax agent wrapped in an app. Clients pay into a Hnry-held bank account in your name. When money arrives, Hnry sets aside income tax, GST if you are registered, and optionally super and student loan repayments, pays those to the ATO, and transfers the rest to you. It lodges your BAS and your annual tax return. You raise expenses in the app so they reduce the tax withheld.

Xero is cloud accounting software. It connects to your bank via feeds, imports transactions for you to categorise with rules and suggestions, and gives you invoicing, bills, GST tracking, activity statement preparation, reports and a large marketplace of add-ons. It does not lodge your tax return; your accountant does. It can lodge activity statements to the ATO from the software once connected.

Price

• Hnry: 1% of the income paid through Hnry, plus GST, capped at $1,500 plus GST a year. On $60,000 of income that is $600 plus GST; on $150,000 or more it is the cap. No income, no fee. The fee is tax deductible and includes the tax return.
• Xero: subscription from around $35 a month for the entry plan, with higher plans for more invoices, bills, payroll and multiple currencies. Around $420 a year at the entry level, plus whatever your accountant charges for the return.

At $60,000 of income the two are close once an accountant’s fee is added to Xero. At higher incomes Hnry’s cost rises to its cap while Xero’s stays flat, but the cap still includes lodgement. The comparison depends on what your accountant charges and how much you value not doing the work.

How your money flows

This is the deepest difference. With Hnry, your business income lands in a Hnry account first and the tax is taken out before you see the money. You never have a tax bill, because it has already been paid. It also means clients pay Hnry’s account details, expenses must be raised in the app to reduce the withholding, and your cash flow is what is left after tax on every payment.

With Xero, money goes into your own bank account and stays there. Xero shows the GST you owe, but setting money aside and paying the ATO is up to you. More control, more responsibility.

Invoicing and getting paid

Both invoice well. Hnry’s invoices carry its account details so payments route through the service. Xero’s invoicing is mature: quotes, recurring invoices, online payment, automatic reminders and reporting. If invoicing depth matters, Xero has more of it; if you want the payment to trigger tax handling, that is Hnry’s model.

Expenses, GST and BAS

Hnry handles expenses by you submitting them in the app with a receipt; it applies the deduction and the GST credit, and it lodges the BAS for you. Bank transactions are not imported for categorisation, because Hnry does not need your full bank history to do its job.

Xero imports every bank transaction via feeds and you categorise them with the help of rules. GST is tracked per line and the activity statement is prepared from the ledger for you or your accountant to lodge. Xero suits a business where the expense side is large or complex; Hnry suits one where income is the main event and expenses are a handful of items.

Tax return and support

Hnry includes your annual return, prepared by its own registered tax agents. Xero does not; you lodge through myTax or pay an accountant, who gets a clean set of books from Xero. Hnry’s support is about your tax; Xero’s is about the software.

Who each suits

Hnry tends to suit: contractors and freelancers with mostly service income, few expenses, a dislike of tax admin, and no objection to income flowing through a third-party account.

Xero tends to suit: sole traders with a fuller business (materials, stock, several expense lines, perhaps staff later), those who already work with an accountant, and anyone who wants income paid directly to their own account.

Neither is wrong, and people move in both directions as their business changes.

Where FlowFi fits

FlowFi sits between the two. Like Xero, you keep your own bank account and your own books; unlike Xero, there are no bank feeds: you upload a CSV or PDF statement and AI categorises every line, flags GST and deductions, and prepares each BAS label with a copy-guide for ATO Online. Like Hnry, it is built only for sole traders, at $29 a month or $290 a year with a 14-day free trial and no card. Unlike Hnry, it does not lodge for you or hold your money. See FlowFi vs Xero and FlowFi vs Hnry for the direct comparisons.

Prices and features were checked in September 2026 and change often. Confirm current plans on each provider’s website before deciding.