Best payroll software for small businesses

2025 brings a number of big payroll changes. With employer National Insurance Contributions (NICs) due to rise, and a host of leave that will affect employee benefits, the complexity of payroll calculations will require advanced HR and payroll software.

These changes will impact various HR functions, but payroll will be particularly affected. To maintain compliance, SMEs should consider implementing dedicated payroll software, which tends to be cheaper and sometimes includes advanced HR features anyway.

Our researchers have analysed the top providers for pricing, security, features, and usability. We’ve reviewed our favourites below; all of which offer outstanding value for money, as we know that budget constraints are often your main consideration.

Payroll software at a glance:

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FEATURED PROVIDER	BEST ALL ROUND
Provider QuickBooks	Provider Staffology by IRIS	Provider Sage Payroll	Provider Xero	Provider Moorepay
Cost £3.30-£11.50/mo plans* + 0.50/mo for payroll features *For the first six months	Cost £35 for up to 19 employees £1.75 per payslip for 20-50 employees Pricing on request for 51+ employees	Cost £10-£30/mo plans + £2-£6/mo for additional employees	Cost £33-£59/mo plans* *Currently 90% off if you buy before 31 January	Cost Provides personalised quotes after assessing business needs
HMRC compliant	HMRC compliant	HMRC compliant	HMRC compliant	HMRC compliant

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Below, we’ll guide you through the best platforms for SMEs, as identified by our research team, to find the best one for your unique needs. Or, to save time, fill in our simple 🔍cost comparison tool to find quotes tailored to your business operations in one minute.

1. Staffology by IRIS: best overall, with specialist support for construction firms

Staffology’s dashboard view displaying the process of calculating and distributing employee wages and salaries for a specific pay period, known as a pay run – Image source: Staffology.co.uk

IRIS is one of the UK’s longest-running private software companies. It’s been supplying administration solutions to the country’s businesses, charities, and public sector for over 40 years – and has used that time wisely to implement lots of user-centric features that simplify the payroll process.

Staffology by IRIS is an online payroll solution that’s user-friendly, affordable, and a great all-in-one solution for SMEs. It keeps all of your company payroll data securely in a centralised location for ease of access.

What is Staffology’s USP?

Staffology offers full support for managing and paying Subcontractors under the Construction Industry Scheme (CIS) regime, which makes it ideal for construction firms employing sub-contractors. But there are lots of other perks that make it suitable for all industries.

In 2025, AI has come to payroll. Staffology’s Auto-Pilot feature automates repetitive payroll tasks, saving time and reducing errors. It can finalise payruns, distribute payslips, file HMRC submissions, and generate payment summaries, so you’re not really getting a DIY approach at all, but a specialist payroll assistant that lives in your work computer.

Handily, the Auto-Pilot feature also instantly responds to any mid-year legislation changes. For any surprise updates to employment law, Staffology will release coding notices which can be automatically (or manually added, whichever you prefer) to your software to ensure complete compliance without you needing to do anything.

In terms of more practical considerations, the software integrates with HMRC, so online submissions are accurate all year round. RTI reporting and auto-enrolment are included, so compliance is no issue either. You can also brand the software with your own company logo for that extra professional touch.

Verdict

Staffology by IRIS is a great all-round payroll software that encompasses compliance, security, and accessibility. It’s ideal for small businesses wanting a professional, reliable service that offers flexible payroll options.

2. Sage: best for small teams with up to five employees wanting a dedicated accounting resource

Sage Payroll offers the ability to update employee personal information, such as address, phone number, and emergency contacts – Image source: sage.com

Sage has been specialising in payroll, HR, and integrated accounting software for more than 30 years. Today its 11,000 colleagues help millions of entrepreneurs manage their payroll and accounting processes.

Rather than billing per payslip, like Staffology does, Sage Payroll pricing is based on team size. It is available over three plans:

• Payroll Essentials (£10 p/m for five employees + £2 per each additional employee)
• Payroll Standard (£20 p/m for five employees + £4 per each additional employee)
• Payroll Premium (£30 p/m for five employees + £6 per each additional employee)

What is Sage’s USP?

Sage’s employee limit of just five employees per plan might seem expensive compared to other options on this list. However, you should remember that Sage is an accounting software, not just payroll, as our full Sage Business Cloud review highlights.

That means it can play the role of accountant for small teams, great for budgeting. The app also provides a very in-depth reporting function. You’ll be able to produce monthly, quarterly, and annual financial reports such as balance sheets, income statements, and cash flow statements.

On top of this, each plan boasts a number of core HR features, although its quite a bit more basic than specialist HR software. On Payroll Essentials, for example, you’ll be able to track and manage employee holidays, plus keep an accurate database of employee records.

Sage’s more sophisticated capabilities mean it can also generate comparative financial statements between two different time periods. Users have an exact understanding of where their cash flow has improved/worsened and can take decisive action based on up-to-date and accurate information.

Verdict

Sage Payroll is an excellent choice for startups or micro-businesses that are just getting off the ground and want a system to play the role of HR manager, accountant, and payroll specialist. You can also trial the software free for 30 days before making any decisions. Or, for an actually free option, check out our guide to the best free payroll software.

3. Xero: best for those paying staff on a weekly basis, such as hospitality businesses

Xero payslips are designed to be clear and easy to understand, providing employees with a detailed breakdown of their earnings and deductions for a specific pay period – Image source: Xero.com

Xero made a name for itself with its industry-leading accounting software, and has since branched out to offer a number of additional features suited for SMEs and sole traders. There are three plans:

• Xero Grow (£33 per month) offers payroll for one employee
• Xero Comprehensive (£47 per month) offers payroll for five employees
• Xero Ultimate (£59 per month) offers payroll for 15 employees

It’s a more expensive upfront cost compared to platforms such as Staffology. However, you must remember this is an accounting platform with payroll features. You’ll really be paying to carry out accounting tasks, such as cash forecasts and settling invoices.

Plus, as you’re being billed per person, not per payslip, it may work out cheaper for those that usually pay their employees on a weekly schedule, such as hospitality businesses.

What is Xero’s USP?

The best thing about Xero is the fact you can manage your payroll and accounting seamlessly in one system, saving you time and resources. In terms of bookkeeping, Xero has a number of excellent automations to make payroll processing as simple as possible. The software automates tax, pay, and even leave calculations, letting you focus on other admin tasks.

Users can also pay a small fee to access more advanced accounting features. For example, for 20p per bill payment, you’ll be able to pay your suppliers through the platform. Plus, if you’re a construction business, you’ll be able to submit CIS returns for £5 per month (although the Staffology CIS module costs a flat rate of £19).

Firms with lots of employees coming and going (like hospitality) also don’t need to worry about getting bogged down with pension re-enrollment – an area where we know small businesses can waste a lot of time on. Xero’s new pension re-enrolment workflow makes managing your cyclical pension duties fast and simple.

Verdict

Automating your payroll duties is one of the easiest ways to ensure everything runs smoothly and up-to-date for that all important payroll year end deadline. 

You will need to purchase Xero Grow for access. However, Xero is always running deals for new joiners, and there is currently a 90% discount for those that sign up to the software before January 31.

4. Moorepay: best for SMEs needing extra customer support and thorough onboarding

Moorepay’s customisable dashboard can show you everything from employee information to a calendar view of upcoming and past pay runs – Image source: moorepay.com

Moorepay is a goliath in the payroll services industry, used to pay one in six of the UK’s working population – but that doesn’t make it any less of a bespoke provider for SMEs.

What is Moorepay’s USP?

Moorepay’s payroll software is better-suited to medium-sized businesses as its costs simply outweighs the benefits for businesses with fewer than 20 employees.

Part of the reason for its higher price tag is that Moorepay is a payroll-cum-employee management tool. It handles a wide range of HR duties like real-time, insightful dashboards and data-driven graphs, and is considerably cheaper than forking out for expensive HR outsourcing fees.

These are undeniably handy, but won’t be necessary for a lot of SMEs. Still, important pull-factors that we know customers want from their payroll are all there with Moorepay and more. Security is dialled up to 10 with single sign-on, biometric login capability and privacy features.

As Moorepay is entirely cloud-based, anywhere access means greater flexibility for you and your employees. Plus, like with Xero, the Moorepay mobile app is gives employees will easily access their payslips, P60s, and view employee benefits – so you’ll get less queries, and have more time.

Moorepay is HMRC compliant and BACS approved (permitted to send faster payment transactions on behalf of third party organisations). Plus, we like how easy it is for you to switch payroll providers as Moorepay’s customer support team makes this a painless process to complete.

Verdict

We really like Moorepay as a secure payment option for teams that are working remotely or in a hybrid model. Its security features are second to none and, with plenty of employee management tools at your disposal, your workforce will be kept happy, updated, and importantly, paid on time.

Still, we’re not impressed by the app’s opaque pricing plans. Lack of transparency is unfortunately an issue with a lot of business software tools. That’s why we designed our 🔍online comparison tool. It’s 100% free to use and gives you direct quotes from the top providers on the market – a much quicker way to compare costs.

5. QuickBooks: best for micro businesses with just one employee

With QuickBooks, you can automate the process of adding new employees to save you time and reduce the risk of errors – Image source: QuickBooks

QuickBooks is a big player in the world of small business payroll software, with some great features that are relied upon by small firms across the UK. Its self-employed accounting software is highly regarded as the best out there, and its payroll software isn’t too shabby either.

QuickBooks has two core audiences: sole traders and limited companies. For the latter, we’d recommend QuickBooks Essentials. For the first six months, you’ll pay a heavily discounted price of £3.30 per month. After this, the cost rises to £33 per month, roughly on par with Xero Growth.

What is QuickBooks’ USP?

If you’re looking for easy-to-use, functional, and aesthetically pleasing payroll software, look no further than QuickBooks. Its HMRC-compliant software does all your calculations for you and updates tax codes automatically, so you can simply submit your figures in a couple of clicks.

Unlike Staffology, Moorepay, Xero, or Sage, Quickbooks pays dues to sole traders with a set of specialist self-employed features. Feel assured you’re paying yourself correctly with Directors National Insurance contributions (NICs) calculations and Automatic Real Time Information (RTI) submissions to HMRC.

That doesn’t mean you can’t hire any other staff. The self-service employee portal has similar functionality to other software providers like Xero, enabling your employee to enter their address, access payslips, enter timesheets, request leave and even submit expenses.

Still, we’d recommend this basic, stripped back system for teams with no more than one employee. It’s low maintenance – but that does sacrifice some key payroll elements like slimmer employee portals and less features on its mobile version than desktop.

Verdict

The fact we could have listed off another paragraph or two worth of features is evidence that QuickBooks is a great payroll software choice for micro businesses or side hustles that want a cheap option they can use to manage both their payroll duties and their cash flow.

As with Xero, integration with QuickBooks’ accounting software is required in order to access the payroll offering.

Payroll software: key features comparison table

Next steps

Regardless of our opinion, you should always compare the best payroll software available before signing on the dotted line. The last thing you want is to be stuck with a service that doesn’t fulfil the needs of your business, even if it’s a great product.

This is where our custom-built comparison tool comes in. We’ve partnered with some of the best payroll software providers to help you get the best service for your business, including the likes of Staffology and Moorepay.

Simply fill in a few basic details, and providers will be in touch with bespoke 🔍personalised quotes for you to compare, along with further details about why the service they offer would best suit the needs of your business.