Best online payroll software for UK small businesses 2023 Find the ideal cloud based payroll software for your business with this in-depth review of the best online payroll providers on the market. Written by Helena Young Updated on 26 October 2023 About Us We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. Written and reviewed by: Helena Young Lead Writer Our independent reviews are funded in part by affiliate commissions, at no extra cost to our readers. The best cloud-based payroll software for small businesses is Sage Payroll.Our thorough analysis found it to offer the most features for the best price, and it comes with 24/7 expert support to boot. We know how important value for money and reliable support are to our readers, particularly when comparing software solutions such as payroll.But Sage isn't the only provider in town. With the UK still grappling with the effects of rising inflation and the cost of living crisis, it's never been more important to get the most value for money from every software plan. Best online payroll software at a glance Sage Payroll – best for small businesses wanting a comprehensive suite of accounting toolsMoorepay – best for SMEs needing extra customer support, and a thorough onboarding processADP iHCM – best for teams with complex payroll requirements, like hospitalityClear Books – best for micro businesses that want flexible payment plansXero – best for small businesses wanting to save time by automating payroll processesRead on for our in-depth analysis, or use our 🔍free cost comparison tool to be instantly matched with the most suitable system for your budget. This article will cover: Introduction 1. Sage Payroll 2. Moorepay 3. ADP iHCM 4. Clear Books 5. Xero How much does online payroll software cost? Is there a free version of online payroll software? Should you use online payroll software? Should you use payroll outsourcing? Next steps =FAQs Introduction: the best online payroll software providersThere are lots of online payroll providers on the market and it would take a long time for entrepreneurs to sift through them all. To save time, we’ve summarised our top choices for SMEs in the table below: Swipe right to see more 0 out of 0 backward forward FEATURED PROVIDER BEST ALL ROUND Provider Rippling Provider Sage Payroll Provider Moorepay Provider ADP iHCM Provider Clear Books Provider Xero Best for Small businesses who prioritise convenience and efficiency and want a user-friendly and all-in-one solution. Best for Small businesses wanting a comprehensive suite of accounting tools Best for SMEs needing extra customer support, and a thorough onboarding process Best for Teams with complex payroll requirements, like hospitality Best for Micro businesses that want flexible payment plans Best for Small businesses wanting to save time by automating payroll processes Cost Starts at £7/m per user, then provides personalised quotes after assessing business needs Cost £8/m for 1-5 employees£13/m for 6-10 employees£19 – £106/m for additional employees Cost Provides personalised quotes after assessing business needs Cost Provides personalised quotes after assessing business needs Cost £5.40 per month (billed annually) Cost £5/m for 5 people£49/m for 10 people+ £1/m for additional employees HMRC compliant HMRC compliant HMRC compliant HMRC compliant HMRC compliant HMRC compliant Optimise your business with Rippling's all-in-one payroll solution Try Rippling 1. Sage Payroll: best for small businesses wanting a comprehensive suite of accounting toolsPricing from: £7 per month, billed annually (first three months are FREE)Sage Payroll's weekly pay breakdownOur expert researchers found that every aspect of Sage Payroll has been designed with the end user in mind. For customers, this meant that taking care of your employees’ pay, tax, and pension contributions – even when payroll year end approaches – didn’t need to be a stressful and time-consuming headache.And, because Sage Business Cloud offers a range of HR tools, its payroll provision can integrate seamlessly with other business admin tools, ensuring you maintain consistency in your financial records. Sage Payroll and Clear Books for example differ in their offerings however, with Sage focusing more on payroll and Clear Books providing a broader accounting software suite.What are the benefits of Sage Payroll?You'll be able to collaborate in real-time on payroll reports with your accountant, and automatically track your payroll data with Sage Accounting (available for £12 per month).Sage’s built-in corrections feature allows you to amend data without rerunning pay runs. Other providers, including Xero, require you to post an unscheduled pay run to correct the mistake quickly, and file it with STP.Another handy, newly-implemented feature is Sage Payroll's integration with Equifax. The partnership automates collating employment and income details to make applying for loans or mortgages easier – an added bonus that staff will thank you for.What are the limitations of Sage Payroll?We found that existing Sage Payroll users have complained extensively about Sage Payroll's month end and year end reports. These are apparently hard to view and often need cleaning up and correcting – particularly annoying if you're an accounting firm taking care of payroll for a client.How much does Sage Payroll cost?Prices start from £7 per month for teams of fewer than five, but there are eight tiers available for fast-growing teams (up to 100 employees).Consequently, researchers like the multi-user access feature – handy if multiple employees are managing the payroll processing – as each individual is provided a unique login for added security. Pros: Expert 24/7 support is available from Sage payroll specialists Fully HMRC-compliant software means you'll save money in avoid late filing penalties Can complete pay run in four simple steps, ensuring staff are kept happy Free 30 day trial is available for those less-experienced with a payroll system Cons: Setup is complicated and time consuming – will need to make use of the 24/7 access to a Sage expert Not as scalable as other competitors - catering to 100 employees max Save Money By Comparing Payroll Software Providers Do you currently use payroll software? Yes No Compare quotes in just minutes 2. Moorepay: best for SMEs needing extra customer support, and a thorough onboarding processPricing from: contact the support team for quotesMoorepay's People DashboardMoorepay’s cloud based payroll software has a slick design and easy-to-use interface, making things super simple for your in-house payroll team (if you have one) to work with compared to clunkier, legacy platforms. It also boasts a top-tier contact team, making it our number one choice for SMEs needing additional support.What are the benefits of Moorepay?With Moorepay, accessing and processing payroll on the go is super easy thanks to Moorepay's mobile app, and is ideal for remote and hybrid working teams. The training and onboarding process is the most thorough of all the competitors we've reviewed, and guarantees to get you up and running with the software effortlessly.When we tested the software, we found that Moorepay is also HMRC-compliant, BACS-approved, and auto-enrolment ready. Plus, its standout feature is its people analytics. You'll get access to real-time, insightful dashboards and data-driven graphs – which is where Sage Payroll falls down.What’s more, if you’re struggling to wrap your head around the countless payroll features at your disposal, the specialist UK-based support team will be on hand to manage any technical requests or issues.What are the limitations of Moorepay?Moorepay’s payroll software is more suited to medium-sized businesses, not micro-sized. Its cost outweighs the benefits for businesses with 2 to 30 employees (despite Moorepay not publicly sharing its pricing plans).However, once you scale into the SME category, Moorepay’s payroll software is a serious contender for the top spot. Its usability, bespoke setup and onboarding process, all generate excellent support and customer satisfaction rating (it gets a Trustpilot score of 4.5/5 stars).Moorepay and ADP are prominent HR and payroll providers, but if you're looking for a provider that is more globally-oriented, ADP might be a better bet for you.How much does Moorepay cost?Moorepay does not publish upfront costs on its website which means businesses need to ring up the contact team to get a bespoke quote. In the current envrionment, with a recession impending, this could be a benefit, however.Haggling for the lowest possible cost will help to score a big saving for your business and strengthen your cash flow. Pros: Data is stored securely in UK IBM data centres, removing any risk to business continuity Real-time reporting and data-driven dashboards for people analytics such as payroll outgoings Professional onboarding and training process when setting up software Cons: Not appropriate for micro-businesses with 5 to 30 employees, as the cost of the service outweighs the benefits Pricing isn’t transparent Compare the best payroll software providers As you'll have noticed, a lot of payroll software companies ask you to contact their sales team for a bespoke quote. Our free 🔍cost comparison tool provides you with direct payroll software costs that you can easily compare. All you have to do is fill out a few details in under a minute, and we will take care of the rest. 3. ADP iHCM: best for teams with complex payroll requirements, like hospitalityPricing from: contact the support team for quotesADP's pay and tax dashboardADP’s cloud based payroll offering iHCM combines two of small businesses biggest responsibilities: payroll and HR. Organisations with a lot of changing rotas, for example hospitality businesses, will find ADP a great tool for tracking employee hours and monitoring more specialist payroll tasks for example, bonuses.What are the benefits of ADP?ADP's cloud based payroll software iHCM is an all-in-one solution that is simple to implement, has an easy-to-use interface, and lets you process payroll accurately through process automation.Our experts found that users particularly like ADP for the simplicity of running payroll reports, which can be done in just two steps. Automations, as with Xero, are a strong point for ADP. Emails are automatically sent to all involved parties when any payroll process is completed, keeping everyone up-to-date and staff happy.What’s more, it is our recommended provider for businesses that need to integrate online payroll software with other solutions, like small business HR software and time and attendance services.What are the limitations of ADP?Customer feedback suggests that ADP is a bad software option for help and support. Its contact team can reportedly take a while to get back to users – frustrating if you encounter a payroll error that needs fixing promptly, such as during month end.Business users can contact ADP through the helpline, but there doesn't seem to be any other sales assistance channel available online.How much does ADP cost?Like Moorepay, ADP does not reveal its pricing which means interested parties need to contact the support team to ask for bespoke quotes. Pros: EU data protection approved so you know your data is in safe hands Integrates with ADP’s HR offering, so you can work on a single system to manage your company’s payroll and employee time, training, and recruitment management The dashboard is completely customisable so you can access what you need easily Cons: The level of customer service needs improvement and isn’t as highly regarded as other competitors Pricing is not transparent - the ADP sales team needs to be approached for a bespoke quote 4. Clear Books: best for micro businesses that want flexible payment plansPricing from: £5.40 per month (billed annually)Clear Books' monthly dashboardAs the most flexible online payroll software solution on our list, Clear Books allows customers to adjust the number of employees on its subscription at any time with any number of employees, unlike Sage Payroll.What’s more, if a business owner decides to change payroll providers or move to managed services, they can cancel their subscription at any time. We think it's the best option for microbusinesses or side hustles that have inconsistent cash flow month-to-month.What are the benefits of Clear Books?Aside from Clear Books’ flexibility, the payroll software offers click-to-pay feature, allowing employers to save time and pay all their staff at once, rather than entering details manually.Payslips, P45s and P60s with company logos and colours can be generated with ease in seconds, which makes onboarding new recruits much easier if you have a higher staff turnover.Integration with Clear Books accounting software also lets you manage and track expenses and tax with ease, which means it rivals Moorepay in terms of financial reporting.What are the limitations of Clear Books?Our thorough evaluation of Clear Books, our expert researchers found that more complex payroll tasks are unsuitable for this platform. For example, if you make a mistake with Clear Books you'll need to undo all periods back to (and including) the incorrect period for these employees.This increases the risk of users making a mistake and potentially incurring a fine from HMRC – much riskier in today's poor economic climate. Sage Payroll makes the process much simpler, by comparison.How much does Clear Books cost?Clear Books is the ideal online payroll software for businesses that need an added layer of flexibility. It is also an affordable solution with transparent pricing, which means it scores better for pricing than Moorepay.With prices starting from £5.40 per month (billed annually) it's also the most affordable. Plus, if you purchase a two-year subscription, that drops even lower to £4.80 per month. Pros: Flexible monthly contracts that can be cancelled anytime Professional, supportive customer service team that answers queries quickly Integration with Clear Books accounting software Manage payroll for Directors Cons: Doesn’t have as many add on features as its competitors The interface could be improved Save Money By Comparing Payroll Software Providers Do you currently use payroll software? Yes No Compare quotes in just one minute 5. Xero: best for small businesses wanting to save time by automating payroll processesPricing from: £7 per month for first three months (£14 per month thereafter)Xero's payroll overviewIn terms of bookkeeping, Xero has a number of excellent features to make payroll processing as simple as possible. The software automates tax, pay, pension, and even leave calculations, letting you focus on other admin tasks.What are the benefits of Xero?Xero’s automation features are unrivalled in the payroll software space, and its Xero Me mobile app is an excellent, easily accessible feature.Automations make the whole process of payroll much easier as fiddly, time-consuming tasks can be managed without business owners needing to constantly check on them, giving them more time to run the company.Sage Payroll also offers some automated tasks, like pension auto-enrolment, but Xero's list of automations is definitely longer.The employee self-service feature is also incredibly handy for viewing payslips and requesting leave online, saving you the hassle of integrating a holiday request system with other software. And on top of all that, the software is HMRC compliant.What are the limitations of Xero?Our expert reasrchers found that one potential drawback in using Xero for your payroll software is that it’s only available with a Xero accounting plan – which could be a problem if you already have existing accounting software.The good news is that Xero is one of the top accounting software brands on the market – in fact, we named it our number three choice in our guide to the top small business accounting software. Still, if you don't want to fork out an additional £10 per month for Xero Accounting, you're better off looking elsewhere for a payroll gizmo.How much does Xero cost?Xero Starter is priced at an incredibly affordable £14 per month and includes three months of payroll software for £7 per month. This plan is available for up to five employees and is a significant saving from the Xero Starter previous price tag of £17 per month. Pros: Xero Me mobile app – employees can enter timesheets and request leave remotely Automates all pay and pension calculations Seamlessly pairs with Xero’s accounting software The first three months are FREE for its payroll software (up to five employees) – then £5 per month Cons: Must be using Xero accounting software to access the payroll service How much does online payroll software cost?The overall cost of an online payroll software depends not just on the the provider you choose, but several other contributing factors. We've listed the most common below:Your company size – software typically charges per employeeSetup and onboarding – some providers will charge you a fee to set up the software and train your employeesIntegrations – you may want to add on and integrate other services and functions to your payroll serviceAverage cost of online payroll software:1 to 10 employees – £5 – £12 per month11 to 50 employees – £13 – £60 per month50 to 100 employees – £61 – £120 per month100+ employees – £121+ per month Is there a free version of online payroll software?In today's climate, budget is easily the most important consideration for SMEs. If you are trying to reduce overheads, there are some high-quality free payroll solutions for small businesses. Our top three picks are:12 Cloud Payroll which includes some powerful features and has lots of support channels openIRIS Payroll Basics which has a great, customer-focused interface that's easy to useCapium which is best for accountants that want a full range of services, including reporting toolsWhat are the limitations of free payroll software?Some of the providers we’ve mentioned in this article, including Sage, Xero, and Clear Books, all of which offer a free trial for new users. However, there are drawbacks to free payroll software. Watch out for:User limitations – a maximum of nine employees max on free software is commonLack of support – free software typically comes with non-existent or very little supportOut-of-date software – free payroll software can be open source and might not adhere to HMRC regulation Should you use online payroll software?Small businesses have increasingly turned to online payroll software as a convenient and efficient solution for managing payroll processes. Let's delve into the advantages and disadvantages of embracing online payroll software, so you can make an informed decision for your business. Why you should: Streamlines and automates payroll processes, so you can massively reduce admin time and paper filing Comes with in-depth reporting functionality – great for business forecasting and reviewing finances Free trials offered by some software providers give you the flexibility to try before you buy Contracts are shorter (typically month-to-month) than they are for outsourcing payroll, which is good for those needing to prioritise cash flow Why you shouldn't: You might have to download a provider’s other platforms too, including its accounting software Although support is available, it is not as dedicated and tailored as it is with a managed payroll service Onboarding issues can arise more frequently than with a fully managed payroll service Should you use payroll outsourcing?SMEs have to know an awful lot to run a business. It's a tall order to ask you to also become an expert in such a complicated topic as DIY payroll and tax filing.Instead, you might choose to outsource your payroll. While more expensive, outsourcing your payroll to a third-party expert will ensure that:Your payroll is managed by a team of certified payroll specialists, meaning you can be confident that the service provided is reliable, accurate and HMRC compliantThere’s flexibility to choose how much you want your payroll service to be involved in the payroll process depending on your requirementsThe provider can deal with the more complex tasks surrounding payroll, including annual P60sTo find out more about the best managed payroll service providers, visit our review of the best payroll service providers in the UK. Next stepsBased on our extensive research into the usability, features, costs, and support options of the top payroll providers, we've uncovered that Sage Payroll is the best online payroll software on the market as it provides 24/7 support combined with an abundance of helpful accounting features.You should always compare the best online payroll software available before signing on the dotted line. In today's tumultuous economy, the last thing you want is to be stuck in a contract with a service that doesn’t fulfil the needs of your business, even if it is a great product.This is where our custom-built 🔍cost comparison tool comes in. We've designed it using our extensive research into the payroll market. Simply fill in a few basic details, and providers will be in touch with bespoke personalised quotes for you to compare – all for zero charge. Online payroll software FAQs What is online payroll software? Online payroll software helps streamline processes through automation and workflows, for example, end of year reporting and automated salary/wage payments. It is online payroll software because it can be accessed remotely and on the go, on any device. What is the easiest payroll software to use? In terms of ease of use, Moorepay is our top choice. This is because you can fully customise your dashboard, and the slick design makes the interface incredibly easy to use. As well as this, its reporting functionality is also incredibly clear, with visually appealing graphs and bar charts for analysis. How to use payroll software? The first thing you need to do is sign up with a provider, that will give you access to the software. After the onboarding process, you will be able to use your payroll software to organise, manage and automate employee payments. Which is the best payroll software in the UK? We recommed Sage Payroll to small businesses as the number one payroll solution. It offers the most features for the lowest cost and comes with 24/7 expert support - two assets that our readers have told us are key for saving them time and money. What is the cheapest payroll software to use? Clear Books is the cheapest payroll provider on the market, currently. Prices start from £5.40 per user (billed annually). How much is payroll software in the UK? More affordable options, like Clear Books, start around the £5 per month mark. Advanced tools like Sage start at £7 per month. Many payroll providers, including Moorepay, will specify that business customers need to contact their support desk for quotes. Startups.co.uk is reader-supported. If you make a purchase through the links on our site, we may earn a commission from the retailers of the products we have reviewed. This helps Startups.co.uk to provide free reviews for our readers. It has no additional cost to you, and never affects the editorial independence of our reviews. Share this post facebook twitter linkedin Tags News and Features payroll Written by: Helena Young Lead Writer Helena is Lead Writer at Startups. As resident people and premises expert, she's an authority on topics such as business energy, office and coworking spaces, and project management software. With a background in PR and marketing, Helena also manages the Startups 100 Index and is passionate about giving early-stage startups a platform to boost their brands. From interviewing Wetherspoon's boss Tim Martin to spotting data-led working from home trends, her insight has been featured by major trade publications including the ICAEW, and news outlets like the BBC, ITV News, Daily Express, and HuffPost UK.