Business Services
Compare payroll services
Payroll is quoted per payslip per month, which makes it look simple. The cost sits in everything that is not a payslip.
Payroll is the classic case of a headline rate that means little. A bureau quoting £4 a payslip and one quoting £7 can end up costing the same, because the first charges separately for starters, leavers, P45s, pension uploads, year-end and any month you send a correction.
The decision is really between software you run yourself and a bureau that runs it for you. Software is cheaper and fine if someone in the business genuinely understands RTI submissions, auto-enrolment duties and statutory pay. A bureau costs more and moves the risk of getting it wrong — and the penalties for late RTI filing are per month, per scheme.
What it should cost
| What you are buying | Indicative UK cost |
|---|---|
| Payroll software, small business | £10 – £40 a month |
| Bureau, per payslip per month | £4 – £8 |
| Bureau, typical monthly minimum | £25 – £50 |
| Auto-enrolment pension administration | £1 – £3 per employee per month, or bundled |
| Year-end and P60s | Often included — confirm it, as it is a common extra |
| Full managed payroll including HR support | £8 – £15 per payslip |
Weekly payroll costs materially more than monthly, because it is four times the processing runs.
What changes the price
- How many employees and how often you pay themThe headline driver. Weekly or fortnightly payroll multiplies the work.
- Starters and leaversA business with high turnover generates far more admin than headcount suggests, and many bureaus charge per starter and per leaver.
- Pension auto-enrolmentAssessment, uploads to the pension provider, opt-outs and re-enrolment every three years. Ask whether it is included or billed separately.
- ComplexityCIS for construction, multiple pay rates, shift premiums, salary sacrifice, statutory maternity and sick pay, and directors on annual earnings periods all add work.
- Who deals with HMRCWhether the bureau is your agent and handles queries directly, or hands you the letter to deal with.
How to compare properly
Take these to every supplier. The answers are usually more revealing than the prices.
- Ask for a total monthly cost based on your actual headcount and pay frequency, not a per-payslip rate.
- Get the extras list in writing: starters, leavers, P45s, P11Ds, year-end, corrections, ad-hoc reports, and off-cycle payments.
- Confirm auto-enrolment duties are covered, including re-enrolment and the declaration of compliance.
- Check the deadline you must hit to send them data, and what happens if you are late.
- Ask about contract length, notice period, and whether the price is fixed or indexed annually.
- Ask how your data leaves if you switch away — you want your payroll history in a usable format, not a PDF.
Ready to compare payroll?
Compare Payroll Services is our dedicated site for this category, with the detail, local coverage and a quote form.
Common questions
Should a small business outsource payroll?
Under about five employees with simple salaries, software is usually enough. Once you add variable hours, pensions, statutory pay or CIS, the time cost and the error risk usually justify a bureau.
What are the penalties for getting it wrong?
HMRC charges automatic penalties for late Full Payment Submissions, scaling with the number of employees, plus interest on late PAYE. Pension auto-enrolment breaches carry separate fines from The Pensions Regulator.
Can a bureau deal with HMRC on our behalf?
Yes, if you appoint them as your PAYE agent. Confirm they will do so, because some bureaus process only and leave correspondence to you.
How hard is it to switch provider?
Easiest at the start of a tax year, but possible mid-year with year-to-date figures. Ask about parallel running for the first month.
Still deciding between options?
Accountant or payroll bureau?
Plenty of small businesses have payroll done by their accountant because it was easiest at the time. That is often fine — and it has specific failure points worth knowing about.
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