Xero's 2026 Price Increase: How to Protect Your Margin Before 1 July

Xero is lifting prices across all Australian business plans from 1 July 2026, and the multi-organisation discount is being removed at the same time. For firms managing client subscriptions at scale, that is a margin hit landing in the middle of EOFY, when you have the least time to think about it.

What makes it worse is the pattern. Vendors now reprice every year, and most firms keep absorbing those rises without ever quite deciding to. The firms that come out ahead set this up once and stop touching it.

We recently ran a webinar with Cassandra Scott from Cass Scott Business Services and Chris Wheatley FCA from Scope Accounting, hosted by Trent McLaren. The session looked at what is changing, how both of them handle subscriptions inside their own firms, and how to decide whether to absorb, pass on, or margin the increase before the new financial year begins.

This blog shares the main takeaways from that discussion.

If you'd prefer to watch, here's the recording:

What Is Actually Changing

Two things land together on 1 July: prices rise across the Australian Xero business plans, and the multi-organisation discount disappears. If you hold subscriptions for clients with more than one entity, that second change is the one that quietly costs you, because the saving you rely on goes away just as the base price climbs.

We have published a full breakdown of every plan and tier separately, so this blog stays on the decision: who wears the increase, and how do you stop it eroding your margin every year from here on?

Absorb, Pass On, or Margin

There are only three things you can do with a vendor price rise.

You can absorb it. You wear the increase and shield the client, which is the easiest path and the most expensive one: the cost base climbs while your fee sits still, and the gap compounds every year.

You can pass it on. The increase flows straight through at the new retail rate. When we polled the room, roughly seven in ten firms said this was their plan. It restores your margin in full, but only if your repeating invoices and engagement letters already support it.

You can margin it. You pass it on with a markup. Cass was cautious here: when the retail price sits on the vendor's own website, a markup can read as something to hide. As Cass put it, it can create "a platform for distrust between the client and the practice."

Why the Discount Was Never the Client's to Keep

The most useful reframe of the session came from Cass. Many practices sign a client up and pass their partner discount straight through. Cass has never done this.

"The commission I make on the Xero subscriptions is my commission. It's actually not for the client. If the client was buying this retail, they would be paying a retail amount for it. So why should it be any different through me?"

Chris said the language itself needs to change. What firms call a commission or a discount is really a wholesale rate.

"It's the wholesale rate, it's not a commission. We have to change the narrative."

Cass put it plainly.

"You go to Woolworths, you can't buy their chips at the wholesale rate. So why on earth would it be the same here?"

This matters at price-rise time. Discount to the wholesale rate and every increase eats into nothing; charge retail and you have room to absorb the lag when you are slow to update your invoices.

The Conversation You Probably Don't Need to Have

For most firms the decision is easy. What stalls them is the fear of telling clients, and both Cass and Chris pushed hard against it.

Cass's view is that the conversation should be over before it starts, because it lives in the engagement letter.

"I made it really clear in my letters of engagement that if any of the software vendors made price increases, we would pass those on automatically. We didn't ask them, we didn't tell them. The next bill, it's increased."

When she did speak to a client, she kept it blunt: "I'm not asking permission, I'm telling you this is what's happening." The kickback was close to non-existent, and the few who push back over a few dollars a month are usually doing you a favour by identifying themselves. As Cass put it, "We love our clients, but there's no friends in business."

Chris made the same point from the cost-of-time angle. One client queried a roughly five percent rise on their invoice: "This conversation is costing me more than what the price rise would have taken." The software had gone up, so it was being passed on.

The lesson: let the vendor do the explaining. Xero communicates its own changes directly and clients see the pop-up the moment they log in, so the news usually lands before your invoice does. As Chris put it, we tend to "assume what someone else will think" and brace for an argument that never comes.

Arm Your Team

The other half is your team. Chris does not want to be the single mouthpiece for every client when a rise lands, so he has spent the last year making sure his whole team can hold the line. When everyone knows the position and nobody negotiates the rate, the principal gets their week back.