Xero has introduced Xero Payroll, powered by Gusto, Melio Expense Management, and API tools as part of a set of product updates for its US customers.
The updates form part of Xero's 3x3 strategy and are intended to bring accounting, payments, payroll, and tax functions into a single platform for small businesses and their accountants and bookkeepers. The announcements were made alongside new features within JAX, Xero's agentic platform, which the company said now supports five million customers worldwide.
Xero Payroll offering includes unlimited payroll runs, automated federal, state and local tax calculations and filings, direct deposit, payments to employees and contractors, benefits calculations, as well as employee self-service functions. According to Xero, the aim is to reduce manual administrative work and give businesses a clearer view of cash flow moving in and out of the company.
Melio expands expense management and adds AI tool
Melio, which Xero acquired in 2025, has launched Melio Expense Management, a tool that allows businesses to track and categorise card expenses in real time without changing credit cards or adopting additional software. The tool works independently of the accounting platform in use, extracting transaction details, categorising expenses and syncing them with the customer's existing accounting system alongside other bills and payments.
In addition, Melio has also introduced Casper, an AI-based client manager for accounting firms. Casper is designed to identify missing information, communicate with clients and support bookkeeping tasks throughout the month, while leaving accountants and bookkeepers responsible for final decisions. The tool is intended to reduce the need for accountants to follow up with clients manually and to make month-end processes more efficient. Casper operates across different ledger systems and is positioned to work alongside JAX.
API access and instant payments
Melio has additionally rolled out the Melio API, a self-serve, B2B payout API providing developers with access to Melio's payment rails, including ACH, real-time payments, paper checks, domestic and international wires and virtual cards. Melio continues to manage payment execution, compliance, risk and delivery, meaning payees are not required to onboard onto Melio to receive funds. At the same time, the API is currently live in closed beta, with wider availability expected in the coming months.
Melio is also extending its instant payments capability, allowing small businesses to make payments at any time, weekends and holidays included.
