5+ Payroll Software For Small Business In The UK 2023

small business payroll software
Photo by Vlada Karpovich

As a small business owner, it’s exciting to expand your workforce. It indicates that your company is expanding and that more people are prepared to devote their time to your goal. On the other hand, what about the logistics of managing them? Not much fun (for the majority of us). Online human resources (HR) and payroll software take a lot of the work off your plate, allowing you to focus on the tasks that bring you into your small business.

We’ve researched the finest payroll software for your small business to help you choose the platform that’s perfect for your needs and budget.

What is a Payroll Service?

Payroll services manage the payroll process for firms, including everything from employee payments to payroll tax requirements. Small business payroll service providers can handle part or all of the payroll process, allowing employers to maintain whatever level of control they desire over employee compensation.

Small business payroll services often offer access to payroll software tools that allow you to track when payroll is done and how much it costs per cycle. While a few organizations have the flexibility to process international labor payments, the majority of corporations are focused on American employees and only provide rudimentary tools for paying global contractors.

What is Payroll Software?

The finest payroll software interacts with accounting software and time and attendance systems, exchanging data and reducing the need for double entry. It’s frequently integrated with the best HR software, but the best vendors make their payroll solutions available separately.

Most payroll software also tracks payroll tax responsibilities, and the finest payroll providers will handle all reporting paperwork with the relevant authorities. Employees can also view their pay stubs and other details using the top payroll software solutions via an employee self-service portal or mobile application.

How Does a Payroll Service Work?

Though each has its own appearance and set of features, most online payroll services operate in the same manner. They are usually equipped with a cloud-based interface for both employers and employees. Employers—or your accountant, bookkeeper, or HR representative—set up benefits and compensation for workers and, in some cases, contractors on some platforms.

When you recruit a new employee, you can ask them to self-onboard via the employee portal, which allows you to conveniently collect their W-4 or W-9 form and contact information, as well as sign them up for appropriate benefits.

Some payroll services provide automated payroll, allowing you to establish worker pay, employees to track their time (if necessary), and the provider to run payroll on time. Workers add direct deposit information, and employers connect a business bank account, so payroll operates without you needing to print and distribute checks.

If payroll isn’t automated, you must do it manually a few days before payday, entering employee pay amounts and arranging paydays.

Many online payroll services include capabilities that allow you to handle benefits on the same platform, as well as accounting software connectors. Many employers provide employees with the option of obtaining a payment card so that they can get funds prior to payday and use the card to make purchases.

Some payroll services are integrated into larger HR platforms that include not only pay and benefits but also employee development, education, and coaching programs.

Payroll Software Features

Payroll services provide a number of features and solutions that help small businesses streamline payroll processing. When choosing payroll providers, the following are some of the most important aspects to look for:

  • Unlimited payroll processing: Some payroll providers allow you to conduct payroll as many times as you wish each month. This provides you with the flexibility to choose the pay periods that are most convenient for your staff. This flexibility also allows you to pay independent contractors as soon as they finish a project without incurring additional payroll costs.
  • Payment methods: The majority of online payroll providers allow you to pay employees using direct deposit, paper checks, or prepaid debit cards (often known as pay cards).
  • Payroll taxes: Online payroll services calculate how much payroll taxes your company owes. They will also prepare and file the necessary documentation with the proper federal, state, and local taxing authorities, as well as make the necessary payments on your behalf.
  • Year-end tax forms: Payroll services prepare and distribute all relevant year-end tax forms to your employees and independent contractors.
  • PTO administration: Some payroll services handle some or all of your PTO administration. Tracking how much PTO employees earn and use, as well as allowing employees to seek time off and managers to approve or deny those requests, are examples of how this might be done.
  • Employee self-service: Most payroll software includes an internet interface where employees may view their pay stubs and year-end tax forms.
  • New-hire reporting: When you hire a new employee, many payroll providers will complete and file the necessary documentation. These paperwork must be filed in the state in which your company operates.
  • Mobile access: Most payroll providers include a separate mobile app or a mobile-friendly website, making the platform available on smartphones and tablets.
  • HR services: Many payroll vendors have begun to offer additional HR services in recent years, such as onboarding tools, employee benefits management, and HR compliance. Furthermore, some payroll companies provide your company with access to dedicated HR professionals that can assist you with HR concerns.
  • International coverage: Paying overseas contractors is supported by some payroll software platforms, but companies like Remote and Papaya were created from the bottom up to ease payments to foreign workers, freelancers, and clients.

Best Payroll Software for UK Small Business 2023

So, which should you choose? Here’s a quick rundown of some of the greatest and easiest to use.

HMRC has approved all of them to verify that they appropriately calculate tax and NI, provide auto-enrolment and are RTI-compliant.

#1. Xero

Has a lot of useful features and is simple to customize for any type of small business. It integrates directly with their accounting program, which is a benefit.

Employees can utilize the Xero mobile app for self-service to access their payslips, submit timesheets, and ask for leave.

Trial period of 30 days. The standard price for up to five payroll staff begins at £5 per month in addition to your package fees. Each additional employee earns an additional £1 per month.

#2. QuickBooks

It is a market leader in the cloud and a smart choice if you currently use the QuickBooks accounting program. In 2020, they expect to have 700+ business app connections. It’s incredibly detailed and covers everything.

It also features a mobile app and a site where employees can update their information, view pay stubs, and request leave. Direct interfaces with supported pension providers are available, as are CIS or salary sacrifice programs, as well as court-order deductions.

Trial period of 30 days. Payroll is normally £4 per month, plus £1 per paid employee each month. The cost of advanced payroll is £8 per month. It must be used in conjunction with a QuickBooks subscription.

#3. Sage Business Cloud Payroll 

A comprehensive web-based solution from one of the most reputable accounting software companies It conveniently connects with Sage’s other systems, allowing for faster financial administration.

You can also run payroll in the cloud on its own. There is some direct interaction with well-known AE pension providers. You can also print or email your payslips, P60s, and reports to eliminate paper clutter.

Previous pay runs can be easily amended, and corrections are handled automatically.

Try it for free for 30 days, then standard pricing begins at £7 per month + VAT for 1 to 5 employees. It is vital to remember that the basic plan includes all features. The price varies according to the number of staff.

#4. BrightPay

BrightPay bills itself as a “breath of fresh air” for individuals who are bored of previous payroll solutions. It was named Payroll Software of the Year in 2018 and again in 2019.

BrightPay, despite being a desktop solution, provides cloud capability to those that require it via their optional Connect add-on.

Small business owners will benefit from automated cloud backup, online employer dashboards, annual leave management, client payroll submission and approval, and an employee self-service portal.

Furthermore, you may use their API to link to the most popular cloud accounting software, such as Xero, Sage, or Quickbooks.

It also has a nice UI, is simple to use, and provides free assistance.
Pricing begins at £69 for businesses with three or fewer employees. Cloud functionality is offered as an add-on through BrightPay and costs £0.60 per month per employee.

#5. MoneySoft 

MoneySoft’s Payroll Manager is comprehensive and RTI-compliant payroll software that is designed to be user-friendly, making data entry simple and intuitive.

Automatic enrollment in company pensions is a typical practice. This is a possible solution if you are not ready to migrate your payroll to the cloud.
The payroll manager from MoneySoft is only accessible as a desktop application.

The advantage is that it connects with their bookkeeping software, Money Manager 7, which is only £125 + VAT for a one-time purchase. It can be used for a variety of commercial and personal accounts. Pricing for a single firm with up to 20 employees begins at £78 per year.

#6. KashFlow 

The payroll package can be used independently or in conjunction with KashFlow’s own online accounting software, making it simple to transfer payment information between the two.

Employees can access their payslips and personal data from anywhere and at any time, thanks to the self-service function. The disadvantage is that automatic enrollment is not included and must be purchased separately.

Payroll core starts at £6.75 per month for up to 5 employees or £22.50 per month when paired with accounting. The cost of additional staff is £1.13. The automatic enrollment module costs £1 per month per employee.

Choosing Payroll Software

Choosing the best payroll provider for your small business involves three major steps. These are discussed further below.

#1. Determine Your Company’s Needs

There are various variables to consider when selecting an online payroll provider for your small business. Budget will be a major consideration for most businesses when deciding which service to use. How much money can your company afford to spend on payroll processing and other services? What features are optional, and which are absolutely necessary?

Many payroll systems are bundled into bigger suites of HR and human capital management (HCM) software, making them inseparable from these broader offerings and, hence, inappropriate for firms looking for only a payroll package.

#2. Investigate Potential Vendors

Once you’ve determined what features you want in a payroll software provider, you may develop a list of suitable vendors. From there, you can compare the features each vendor provides and see where each one excels or falls short. Compare each system to your list of desired functions, and eliminate platforms that do not match.

#3. Make Your Choice

After you’ve assessed the benefits and drawbacks of each supplier, you may narrow down your choices and begin the sign-up process with your selected vendor. Check to see if you can negotiate the listed price, and always inquire about discounts; recently removed offers or incentives may still be available upon request. After you’ve determined which software is appropriate for your company, you can begin the setup process.

Can I Do My Own Payroll UK?

If you opt to do your own payroll, you must accomplish certain duties before you can pay your employees for the first time. You have control over when and how frequently your employees are paid. Register as an employer with HM Revenue and Customs (HMRC) to obtain a PAYE Online login.

Can I Do My Own Payroll UK?

Here’s how to get started with payroll:

  • Establish a pay cycle.
  • Gather personnel information as well as tax paperwork.
  • Determine your gross pay.
  • Determine your net pay.
  • Begin payment
  • Pay your taxes and retain receipts.

What is a PEO Payroll Service?

A PEO payroll service is a co-employer that manages your employee data as well as other basic HR functions for your business, such as payroll. It’s simply a payroll outsourcing service.

How Long Does Payroll Take to Process?

It normally takes five business days from the completion of internal payroll processes to the deposit of a check into an employee’s bank account via direct deposit. It takes longer if checks are mailed to employees.


When we examine the finest payroll software for small businesses, we seek for a robust set of features and services. That means we’re looking for unlimited payroll runs as well as administrative and employee access options. This post has successfully covered all you require.


Leave a Reply

Your email address will not be published. Required fields are marked *