Wave, Xero, FreshBooks or Zoho Books: accounting prices in Canada

Start with what the CRA makes you do

Accounting software has three jobs in a small Canadian business. Send invoices and get paid. Track the sales tax you collect and the sales tax you pay. Keep records you can hand over if someone asks for them. Everything else is a nice extra.

Sales tax is the part that catches people out. The CRA says your registration date depends on when you go over the small supplier threshold of $30,000, and you are no longer a small supplier once your taxable revenues pass that in a single calendar quarter or over the last four consecutive quarters ¹. If you are anywhere near that line, pick software that handles GST and HST properly from the first invoice. Going back and fixing a year of records by hand is miserable.

The CRA also says you usually have to keep your records for six years from the end of the year they relate to ². Six years is longer than most people stay with one vendor. So before you sign up, find the export button and check what comes out of it. A tool you can leave is worth more than a tool with one more feature.

What the plans cost in Canadian dollars

Two of these tools have a real free plan. Wave Starter is $0 and still sends unlimited invoices and keeps your books ³. Zoho Books has a free plan that stays free for as long as your revenue for the financial year is under C$50K, with one user plus your accountant ⁴. If you are under that line and your needs are simple, you may not need to pay anything at all.

The paid entry plans are clustered close together. Zoho Books Standard is C$20 a month billed monthly ⁵. Wave Pro is $25 CAD a month, which mainly buys you automatic bank imports ⁶. Xero Starter is $25 a month at the regular price, and the page states plainly that prices are in Canadian dollars and exclude applicable taxes ⁷. FreshBooks Lite is $26.00CAD/mo ⁸. A few dollars either way should not decide this.

The next rung up is where the real money is. Zoho Books Professional is C$35 a month ⁹ and Xero Standard is $60 a month ¹⁰. Businesses with a couple of staff and a steady stream of bills usually land on that rung within a year, so compare there too, not just at the entry level.

QuickBooks and Sage both sell accounting software in Canada and both are worth a look. Their Canadian pricing pages block automated checks, so we could not verify their numbers against the source and left them out rather than print a price we could not stand behind. Go to their own pages and read the regular price next to the promotional one.

The price in the ad is a promotion

Every paid plan here is currently advertised at a discount, and every discount ends. Xero gives new customers 80% off for the first three months, so Starter reads as $5 a month before it goes back to $25 ⁷. FreshBooks shows 80% off for four months, so Lite reads as $5.20CAD/mo before it goes back to $26.00CAD/mo ⁸. Wave runs a promotion too, at $9.50 a month for the first three months on its US pricing ⁶.

None of that is dishonest. The regular price is printed right beside the promotional one on all three pages. The trap is budgeting from the number in the ad and then being surprised at renewal.

Do one small thing when you sign up. Put a calendar reminder two weeks before the promotion ends and write the regular monthly price in the reminder. That is the moment to decide whether the tool earned its keep, while leaving is still cheap.

Watch the currency switch as well. Wave's page defaults to US dollars, where Pro shows as $19 a month rather than $25 CAD ⁶. You can compare two tools and not notice you are comparing two currencies.

A free plan stops being free when you take cards

Wave makes its money on payments, not on software. On the free Starter plan, taking a credit card costs 2.9% + $0.60 per transaction ¹¹. Amex is 3.4% plus the same per-transaction charge, and Pro gets a discounted rate on the first ten transactions each month ¹¹.

Whether that matters depends entirely on how you get paid. If your customers e-transfer you or pay by cheque, the card rate is irrelevant and free really is free. If most of your invoices are paid by card, that percentage is the biggest line in your software bill and the monthly plan price is close to noise.

So before you compare any of these tools, pull three months of deposits and work out how much of your revenue arrives by card. Then compare card rates first and subscriptions second.

Payroll is a second bill, not a feature

If you have staff, payroll is sold separately from the accounting plan. Wave Payroll in Canada is a $25 CAD base fee each month, plus $6 per active employee and $6 per independent contractor you pay ¹². That sits on top of whatever you pay for the books.

Check the coverage before the price. Wave handles automatic tax payments and filings in all provinces and territories except Quebec ¹². If you pay people in Quebec, that rules it out, and it is the first question to ask every other vendor on your list.

The honest comparison is the base fee plus your actual headcount, not the advertised starting price. Two employees and six employees are different bills.

The price jumps when you add volume or people

Entry plans are capped, and the caps are low. Xero Starter lets you send 20 invoices and enter 5 bills ⁷. If you invoice more than that, the plan does not nudge you, it stops you, and you move to Standard at $60 a month ¹⁰.

Users are the other trigger. Zoho Books Free is one user plus an accountant ⁴, Standard covers 3 users ⁵ and Professional covers 5 users ⁹. FreshBooks charges per head instead, at $13/mo per extra team member ⁸. The moment your bookkeeper, your office manager and you all need to be in there at once, the cheap plan is gone.

Count the people who will actually log in, and count the invoices you sent last month. Those two numbers decide which row of the pricing table you belong on, and they are the only two worth arguing about.

How to choose this afternoon

Write down four things: invoices sent last month, number of employees paid, the share of revenue that arrives by card, and how many people need to log in. That page of notes answers the question faster than any comparison article, including this one.

Then use the trials, because they are generous. Xero gives 30 days of access to all its features before you pick a plan ⁷, FreshBooks gives 30 days with no credit card ⁸, and Zoho Books gives 14 days on its paid plans ⁴. Load one real month of your own transactions, not sample data, and try to produce a GST or HST summary you would be willing to file. If that is awkward in the trial, it will be awkward forever.

Ready-made accounting software is the right answer for almost every small business here. These tools cover invoicing, sales tax and record keeping for less than the cost of an hour of a bookkeeper's time, and a custom build cannot beat that. Custom work only earns its price further along, when the bottleneck is moving data between your accounting tool and something else you run, such as a booking system, a job sheet or a point of sale, and you are paying someone to retype the same numbers twice.