Best free payroll software for UK small businesses in 2024

1. IRIS Payroll Basics – best for fast-growth startups

Source: IRIS Payroll. We like that IRIS automatically stores employee payroll data under the ‘Payroll History’ tab, which you can easily view and download for reporting purposes.

IRIS is a well-reputed provider with an impressive user base (over 2.5 million UK employees are paid through the software). Because of its wide range of modules and products, it’s ideal for fast-growth startups looking for a scalable platform that can support their growth ambitions.

Because its free plan, Payroll Basics, has a user limit of nine employees, companies won’t be able to use IRIS for free forever. When users inevitably need to upgrade to a more advanced tool they can avoid fiddly data migration with the IRIS upgrade tool.

Through the tool, all pay information is automatically copied over to any IRIS software so that businesses can get advanced payroll features like HR services or priority customer support, without worrying about losing employee data.

What do you get with IRIS Payroll Basics?

Employee portal: IRIS has a self-service employee portal (available on mobile and desktop) that lets workers access payslips, P45s, and pension letters from any location. The portal can also be customised using your corporate colours and logos to build trust amongst staff.

Compliance: IRIS is regularly updated with real-time adjustments to ensure the software is always fully HMRC compliant. This is handy for small teams without a payroll expert, as it’s common for legislation and tax changes to be introduced throughout the year.

What don’t you get with IRIS Payroll Basics?

Payslip control: during PAYE (the system an employer or pension provider uses to take Income Tax and National Insurance contributions before they pay wages or pension) IRIS Payroll Basics can only be configured to handle one type of payment (like salary) and one type of deduction (like taxes) for each employee per pay period. For more complex payroll scenarios, users will need to upgrade to a more feature-rich payroll software solution.

2. Shape Payroll – best for sole traders or side hustlers

Source: Shape Payroll. The Shape sidebar is designed to take care of core payroll functions such as editing account information, viewing payslips, and recording HMRC submissions.

We recommend Shape Payroll to those who run a side hustle and want HMRC-compliant software to pay themselves. Its quick setup time makes it an ideal platform for time-stretched sole traders with little to no payroll expertise.

Our researchers particularly like Shape’s ‘starter wizard’, a tool to simplify the switch to Shape from another platform. It’s essentially a checklist that takes users through employee setup and onboarding in six clear steps, covering everything from name and address to P45.

That said, business owners can only use Shape to pay themselves due to the platform’s limited pay runs. Users can submit a single payroll for one employee (with three payslips) per month. To pay another team member, firms will need to upgrade to Pro (£10 per month).

What do you get with Shape Payroll?

Security: Shape double-encrypts all sensitive information, such as entrepreneur card and bank account details. It also works with independent security teams to ensure its servers are up when users need them for 24/7 access to payroll data and information.

Time savings: Shape automatically generates Full Payment Submissions (FPS) and Employer Payment Summaries (EPS); both of which must be legally submitted to HMRC at the end of the month. Busy entrepreneurs can save time and avoid mistakes in data entry.

What don’t you get with Shape Payroll?

Customer support: the free plan does not have any customer support channels (eg. email, phone, or live chat). Shape is an easy-to-use system so this is not a dealbreaker, and there is a community forum where fellow users can provide advice to those who are stuck. However, company owners who are less experienced with payroll software may struggle during setup.

3. Primo Payroll – best for free customer support

Source: Primo Payroll. Primo Payroll automatically updates its system to ensure employers understand and remain fully compliant with new tax codes.

Primo Payroll’s free plan is available for 10 employees (versus Shape’s one and IRIS’ nine) so it’s primed for larger teams. It’s also the only provider on this list to offer free customer support for employers needing bespoke help with payroll.

Another Primo strength is its simple automatic enrolment solution for pension management. Automatic enrolment for pensions is a huge admin burden. Every week, companies need to send data between payroll and pension systems; a time-consuming and error-prone task.

With Primo Payroll, all auto-enrolment compliance tasks including the postponement period are performed automatically in the background. Any information saved in Primo will be instantly uploaded to a company’s pension system. And yes, it’s all available on the free plan – although pension providers may charge a small fee for the integration.

What do you get with Primo Payroll?

Scalability: Primo is a scalable system with transparent pricing; users can upgrade to Essentials 25 for a flat rate of £25.99 per year (for up to 25 employees). This permits access to the holiday pay module to automatically calculate holiday pay entitlement per employee.

Customer support: new business owners, or those without a lot of payroll software knowledge, can contact the Primo Payroll customer service team by email for (low-priority) expert help – a perk that neither IRIS, EnrolPay, nor Shape Payroll offer.

What don’t you get with Primo Payroll?

Bulk payments: this feature lets companies send salaries to staff electronically in one go, rather than issuing individual payments. Primo does not offer bulk payments on its free plan or Essentials 25, so users will have to manually send payments via bank transfer.

Self-service: Unlike IRIS and Shape, Primo does not offer a self-service employee portal, so employees can’t easily view things like annual leave requests and accruement. Likely, this will lead to a lot of back-and-forth between employees and managers, increasing workload and frustrating both parties.

4. EnrolPay – best for retail and hospitality businesses

Source: EnrolPay. EnrolPay’s self-service portal lets both employees and employers with minimal payroll experience easily track and view pay data.

We recommend EnrolPay’s free plan, Self Service, to retail and hospitality firms. While lacking in key areas including RTI compliance, our research shows it is a great way to get a foot in the payroll door with a basic platform with no in-house IT expertise required – perfect for brick-and-mortar businesses like shops or cafes.

Employees (Self Service caters for up to 10) report good experiences with the self-service portal. Accessible from smartphone, tablet, laptop or PC, it is perfect for larger teams or managing workforces with high turnover (both of which are common in the service sector).

What do you get with EnrolPay?

Customisation: EnrolPay boasts a rollback function (for amending payroll before Full Payment Submissions are submitted) and write-back function (for correcting information that has already been submitted to HMRC). Both features are helpful for sectors employing part-time and temporary staff with fluctuating hours, like retail and hospitality.

Messaging app: one nice-to-have feature from EnrolPay is the internal messaging tool, which allows for secure messages to be sent between employees and employers, with an audit trail for all communications. This will save payroll teams and managers time by allowing staff to contact them directly and instantly with payroll queries.

What don’t you get with EnrolPay?

Automated payroll: Self Service does not perform payroll processing automatically, and therefore isn’t RTI compliant. Instead, employee earnings and tax data will need to be manually submitted to HMRC by finance experts; a dull and fiddly process that invites errors and potentially penalties. Firms should upgrade to EnrolPay Assisted Service (for automated payroll) as soon as their cash flow allows for automated and accurate payroll processing.