Payroll compliance is a floor both platforms clear
Single Touch Payroll Phase 2 expanded what has to be reported on every pay run — employment basis, income types, and a breakdown of amounts that used to be reported as a single gross figure. The ATO set 1 January 2022 as the mandatory start date, and both Xero and MYOB applied for and were granted digital-service-provider deferrals that pushed the real cutover out for their customers: MYOB's ran to 1 January 2023, Xero's to 31 March 2023. Both platforms report STP2-format data to the ATO on every pay event today, so a new company is not choosing "STP2-compliant" versus "not" — that decision is already made, and the deferral timing itself is a historical footnote rather than something a new company needs to weigh.
Where the two diverge is pay-item setup: how income types, allowances and leave categories get mapped the first time a pay run is built. That mapping work happens once, at setup, and it is where a payroll operator earns their keep regardless of which platform holds the file.
Bank feeds: how transactions actually arrive
Both platforms pull transactions from Australia's major banks through direct feed arrangements — no manual CSV import required for the accounts most new companies open first. Both also support Open Banking feeds under the Consumer Data Right, the government-regulated channel that replaced older screen-scraping methods with a bank-authorised data-sharing standard.
The practical difference shows up at the edges of the bank list. Xero extends its direct-feed coverage with a third-party data aggregator for institutions it does not connect to directly, which is how it reaches a long tail of smaller banks and credit unions beyond the big four. MYOB's published position is that its supported feeds run through direct connections or Open Banking rather than screen-scraping. For a company banking with one of the major four, this distinction rarely matters day to day; for a company using a smaller regional institution, it is worth checking the specific bank against each platform's current feed list before committing a ledger to either.
BAS and activity statements: the lodgment path
Both platforms can prepare an activity statement from reconciled ledger data and lodge it electronically. Neither one is a shortcut around the ATO's own authorisation chain to get there. To lodge an activity statement directly from either platform's connection to the ATO, the software has to first be nominated as the business's Standard Business Reporting provider inside ATO online services — a step the business (or its agent) completes through the ATO's own portal, not through Xero or MYOB support.
Once that connection exists, the mechanics are close to identical on both platforms: GST and PAYG withholding figures pull through from the ledger, the statement gets a final check against the source data, and lodgment returns a confirmation from the ATO within the same session. The activity statement can also still be lodged the traditional way — through ATO online services directly, or by a registered agent lodging on the business's behalf — independent of which accounting platform sits underneath it.
What differs is where each platform surfaces that workflow: Xero folds it into its Activity Statement report; MYOB folds it into its Prepare BAS or IAS flow inside the accounting product. Same destination, ATO SBR, reached through a different screen.
Agent access: who can see the file, and who can lodge
This is the layer most new companies underestimate, because it is actually two separate permission systems stacked on top of each other. The ATO's own client-to-agent linking process determines who is legally authorised to lodge on a business's behalf — a business nominates its registered agent through ATO online services, and that nomination has to happen regardless of which accounting software the business runs. No accounting platform can substitute for that step or complete it on a business's behalf.
Layered on top of that is each platform's own file-access model, which is a separate, software-level permission. In Xero, a business owner invites a bookkeeper or accountant into the organisation and assigns a role — the advisor role gives full access to settings, journals and reports, distinct from the standard-user role built for day-to-day entry. In MYOB, a practice connects to a client's file through its own practice login, which then surfaces the file inside the practice's dashboard rather than through a peer-to-peer invite.
The result is the same shape on both platforms: a bookkeeper or BAS agent gets working access to the file through the software's own invite system, while the authority to actually lodge with the ATO runs through the government's nomination process, not through either platform. Licensed lodgment work runs through your registered agent either way — the software choice does not change who is legally on the hook for what gets lodged.
Ecosystem: what plugs in around the core ledger
Both platforms sit at the centre of a wide add-on marketplace — point-of-sale, inventory, job costing, payroll extensions and industry-specific tools connect to both through published APIs. Neither ecosystem is a closed system, and neither is meaningfully larger in a way that matters for a company still choosing its first accounting stack; what matters more is whether the specific tool a business already runs — a POS system, a payments processor, an inventory app — has a maintained connector into the platform being considered.
The more relevant ecosystem question for a new company is usually migration, not marketplace size: how cleanly historical data, chart-of-accounts structure and open invoices move if the company later needs to switch. Both platforms support data import and export in standard formats, and both are common enough that most bookkeeping practices can work in either without a learning curve.
Where this leaves the decision
Nothing in STP2 reporting, bank connectivity, BAS lodgment or agent access rules one platform out for a new Australian company — both clear the same compliance bar through slightly different screens. The differences that do matter are narrower and more specific to the business: which bank it uses, which existing tools need to connect, and which platform the people doing the bookkeeping already know well.
We run client files in both. Bookkeeping process and BAS preparation work the same way regardless of which ledger the numbers live in — the platform choice belongs to the business, not to us.
Reading about it is optional. The books aren’t.
A named accountant, software underneath, licensed partners where the law wants them.