Top 10 payroll software services for UK businesses

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.

HMRC Basic PAYE Tools

It would be shortsighted not to mention HMRC’s own payroll software before going into paid options. While it’s a little no-frills, it takes care of tax and National Insurance, manages employees and can send payment summaries and Earlier Year Updates. 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. Download it from GOV.UK.

Sage Payroll

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 Business Cloud Payroll creates payslips and takes care of hourly payments, bonuses, holiday pay, student loan repayments and 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.

Xero Payroll

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.

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.

Xero plans start from £10 per month; Xero Payroll is an extra £5 per month for up to five employees and £1 per additional employee.

Intuit Payroll

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.

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 Payroll

KashFlow is another popular cloud-based accounting software provider; its offering includes programs for bookkeeping, payroll, HR and a specialist solution for healthcare providers.

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.

BrightPay

Specialist payroll software BrightPay serves 100,000 British employers and boasts a 99% customer satisfaction rate.

BrightPay’s interface is packed with features but is simple enough for anyone to use; it feels right at home with Microsoft Office. The software can assess employees automatically and give you prompts; it’ll also create letters, forms and payslips for you. Information is sent to HMRC in real-time, so you’re always up-to-date.

BrightPay pricing starts from £49 for a yearly license for up to three employees, with the top tier supporting unlimited staff for £199.

FreeAgent

FreeAgent is another well-rounded bookkeeping and accounting solution that offers payroll management as part of its package. 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

Reio claims that its software can whittle your employee management time down to just 10 minutes a month. The Reio suite handles payroll calculations, HMRC submissions and basic HR functions such as time off, holiday leave and employee data. 

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.

Reio Team is free for businesses with up to 10 employees; Premium costs £5 per employee, per month priced annually. A custom Enterprise package is available on request.

IRIS Payroll

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.

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

Fourth produces workforce management software designed specifically for hospitality and boasts high-profile clients including Hilton, Dishoom and PAUL. Its features include payroll, scheduling, demand forecasting and service charge allocation, so it’s ideal for businesses employing shift workers. 

On top of that, Fourth’s purchase-to-pay suite takes care of purchasing, invoices, inventory, recipes, menus and nutrition. 

Pricing varies; get in touch with Fourth for a quote.