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As your business grows, you’ll likely pick up staff to help with the workload – but the additional paperwork that comes with employees can be difficult to manage. Some accounting software and HR packages include payroll as a standard feature, but many do not.
Typically speaking, payroll software handles your employees’ taxes and factors in absences, holiday pay and bonuses. Some software is geared towards salaried workers, while others cater to hourly staff.
These days, many providers will automatically send reports to HMRC; this helps you to ensure that your taxes are always filed on time.
We’ve compiled ten of the best and most user-friendly payroll services for businesses in the UK. Each option includes pointers on the software’s strengths and shortcomings, along with pricing and where to find out more. Explore our list of the top payroll software UK providers below:
One of the most well-known cloud based payroll software companies out there, Sage is more or less synonymous with business software, and for good reason. Founded in 1981 in Newcastle-upon-Tyne, the billion-pound company is the third largest business software provider in the world and number one for small businesses. Sage offers payroll software uk businesses can really benefit from, with a range of different features to take advantage of:
- Creates payslips.
- Takes care of hourly payments.
- Takes care of bonuses and holiday pay.
- Takes care of student loan repayments.
- Takes care of National Insurance deductions.
Pay runs take just four steps and Sage claims that no experience or training is necessary. Best of all, you have full access to every feature no matter how big your company is.
Sage Business Cloud Payroll is available for as little as £3.50 monthly for businesses with up to five employees; it can be bundled with Sage’s accounting software for a discounted price.
Bamboo Payroll Software
HMRC Basic PAYE Tools
It would be shortsighted not to mention HMRC’s own product amongst the best payroll software uk businesses can benefit from. Below is a list with some of this software’s key features:
While it’s a little no-frills, the HMRC payroll software takes care of the following:
- Tax and National Insurance (NI).
- Manages employees and can send payment summaries and Earlier Year Updates.
- Checks the National Insurance Number for new employees.
The downside: it doesn’t produce payslips, and your business must have fewer than 10 employees.
Basic PAYE Tools is a strong option if you’re on a shoestring budget and only require the essentials. You can download the HMRC payroll software from GOV.UK.
Xero only joined the British software scene in 2008, but it’s quickly become one of the most popular cloud-based accounting solutions in English-speaking countries.
- Flexible pay calendars.
- Calculates statutory pay.
- Provides encrypted, electronic payslips.
- Helps to manage pension filings.
- Payroll data can be submitted from Xero straight to HMRC.
Xero’s clean lines and compatibility with over 700 apps will particularly appeal to digital entrepreneurs, but you’ll need to use Xero as your accounting software provider in order to enjoy its payroll plugin.
You will likely know Intuit as the maker of QuickBooks, Mint and TurboTax. Intuit QuickBooks Payroll works seamlessly with QuickBooks to calculate National Insurance, tax and pension contributions and handles payslips and employee forms with ease. Payroll also sends real-time information to HMRC, so your records are always up to date. The Intuit QuickBooks Playroll provides payroll software uk businesses can rely on, helping with the following:
- Can help track income and expenses.
- Can set up automatic chase-ups for late payments.
- Can connect to multiple bank accounts.
- Comes with a free mobile app.
- Can store receipts as pictures on the app.
If you’re already using QuickBooks, Payroll is a no-brainer: it costs just £1 per person monthly and streamlines your accounts. As with Xero, you’ll need to be on the accounting platform in order to use payroll.
Intuit Payroll costs £1 per employee, per month when added to a QuickBooks subscription, which starts from £18 per month.
KashFlow is also one of the popular cloud based payroll companies out there; its offering includes programs for bookkeeping, payroll, HR and a specialist solution for healthcare providers.
- Can automate payroll approval.
- Gives employees access to their payslips from anywhere at anytime.
- Provides payroll updates in real time.
- Has information pointers on particular terms to help users navigate the payroll software.
- Calculates National Insurance, tax and more.
KashFlow Payroll can be used separately from or in addition to KashFlow’s flagship accounting software. Alone, it’s a user-friendly way to automate payments and handle tax; there’s also a self-service feature for employees to access their own payslips and records.
KashFlow Payroll subscriptions start from £6.50 per month for up to five employees, plus £1.10 per additional employee.
FreeAgent is another well-rounded bookkeeping and accounting solution that offers payroll management as part of its package.
- Can automatically create monthly/weekly payslips for all employees.
- Will create P60s for all employees.
- Mobile app comes with a range of useful features.
- Everyone in their British support team being an experienced accountant.
Its mobile app is particularly good as it’s simple to use but full of features like time tracking and photo upload for receipts. FreeAgent’s customer service is also rather impressive; everyone in their British support team is an experienced accountant.
FreeAgent offers plans for sole traders, partnerships and limited companies, starting from £19 per month; new customers get 50% off.
Reio claims that its software can whittle your employee management time down to just 10 minutes a month. Reio offers payroll software UK businesses can utilise to assist them with the following:
- Handles payroll calculations.
- Handles HMRC submissions.
- Handles basic HR functions (e.g. time off, holiday leave and employee data).
- Reio’s Team plan is free for businesses with up to 10 employees.
- Integrated with such popular software tools as Google Suite and Xero.
Reio’s free-of-charge Team plan offers quite a generous package for businesses with up to 10 employees, although you’ll need to shell out for the Premium plan to be able to manage part-time workers, pay contractors or set up employee benefits.
Premium costs £5 per employee, per month priced annually. A custom Enterprise package is available on request.
IRIS has been around for an impressive 35 years, with British businesses filing over 3 million tax returns through its software annually. The IRIS suite includes programs for accountancy, payroll and HR for businesses of all sizes, including a specialist system for medical professionals.
- Automatic calculations for enrolment and payment.
- Free software updates.
- Provides free payroll that is RTI-compliant and HMRC-recognised.
- Calculates PAYE, National Insurance and more automatically.
If your business has 10 or fewer employees, IRIS offers a simple, user-friendly payroll system for free. Download IRIS Payroll for free here.
Fourth produces workforce management software designed specifically for hospitality and boasts high-profile clients including Hilton, Dishoom and PAUL.
- Manages payroll.
- Manages service charge allocation.
- Manages scheduling and demand.
- Fourth’s purchase-to-pay suite takes care of purchasing, invoices, inventory, recipes, menus and nutrition.
So it’s ideal for businesses employing shift workers Pricing varies; get in touch with Fourth for a quote.
What is a Payroll Software?
Payroll Software is a tool businesses can use the automate the processes of paying their employees and all things surrounding this payment. It can help a business to record their employee’s details, calculate and report any relevant information to HMRC, work out statutory pay and much more.
This top 10 list provides various types of payroll software uk businesses can incorporate into their operations, helping them to improve the way they pay their staff through simpler, more efficient methods.
Payroll software is required for those who decide to run their own payroll, the gov website stating that:
“If you decide to run payroll yourself, you need payroll software to report to HM Revenue and Customs (HMRC)”
The software businesses choose to use must have been both tested and recognised by HMRC, as they check to see whether it is effective in reporting the necessary information to its establishment.
Why Should I Use a Payroll Software (UK)?
Payroll Software is required by HMRC if you decide to run payroll by yourself. HMRC Payroll software can be a great way to automate this area of a business’s accounts, and can speed up this process, as well as helping to create accurate payslips for employees and for your records.
Using a payroll software can also make the process of calculating such things as bonuses and holiday pay etc. more straight forward. There are various different types of payroll software uk businesses can use in order to meet the requirements of HMRC. However, it’s important to understand the payroll needs of your business, and explore a few different software options offered before deciding on one. This can help you make a more informed decision on the type of software to use.
Payroll software can also use the payroll data to provide further analysis and reports for a business, helping them to benefit further from their payroll information. For example, by combining payroll data with employee attendance, some softwares can help businesses to gain a deeper insight into the cost of their staff, and its impact upon the business overall.
Desktop Payroll Software vs Cloud Payroll Software
A desktop payroll software is typically installed on the computer. With desktop payroll, the software, and your payroll data, will be stored on your computer. This differs from cloud payroll software, which is not installed locally onto one computer, but rather stored in the cloud. Cloud-based software will usually be paid via monthly subscriptions to the provider.
One of the main differences between desktop and cloud payroll software is accessibility. With desktop payroll software, the payroll data can only be accessed via the computer it was installed in, whereas those with cloud payroll software can access this data via any device, so long as they are connected to the internet, and have the correct login details for their account.
How Much Does Cloud Payroll Software Cost?
The cost for cloud payroll software will vary depending on the type of software you choose. For example, Sage Business Cloud Payroll software is available from £3.50 a month for up to 5 employees whereas KashFlow software subscriptions start from £6.50.
It’s worth noting that different cloud based payroll companies will offer varying services and capacities with their software, so it’s important to explore what’s on offer before making your decision.
Additionally, as previously mentioned, you should also understand precisely what you need from your payroll software, as this will help determine the type to go for, and prevent you from paying more for features you don’t need.