Monchilla charges $5 per company plus $5 per employee for its cloud-based system.

In a prepared statement, Jamie Sutherland, president of Xero North America, "We like the Monchilla team's straightforward approach to filing and paying payroll taxes." Monchilla co-founders Jack Couch and Nanuan Shi, will take leadership positions with the payroll team and support Xero's payroll strategy.

Xero said that when Payroll in Xero is available with full electronic filing and payments of payroll taxes, Xero will migrate Monchilla's customers to the Xero platform.