What’s the best payroll software for small businesses?

Find the perfect payroll service for your small business with this in-depth review of the best payroll software providers on the market.

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Provider
Best for
Cost
HMRC compliant

IRIS

Sage Business Cloud

Xero

Moorepay

QuickBooks

Small businesses needing digital resources to answer employee queries

Small businesses wanting an incredibly affordable payroll software solution

Small businesses wanting to save time by automating payroll processes and streamlining workflows

SMEs needing extra customer support, and a thorough onboarding process

Small businesses wanting to seamlessly integrate payroll with its accounting software

Provides personalised quotes after assessing business needs

Dependant on the number of employees. For example:

 Five employees = £7 per month

 

Starter plan = £17 per month

Standard plan = £31 per month

Premium plan = £38 per month

Provides personalised quotes after assessing business needs

Simple Plan = £10 per month

Essentials Plan = £14 per month

Plus Plan = £19 per month

Selecting the right payroll software for your business is incredibly important. It can be the difference between you pulling your hair out dealing with clunky, inefficient software, or handling payroll with ease and being free to focus on other priorities.

According to our research, the best payroll software for small UK businesses is IRIS. This brand offers a feature-filled, easy-to-use service which includes an incredibly helpful specialist payroll bureau, guaranteed HMRC and RTI compliance, and unlimited phone and online support.

But the important question is, regardless of IRIS’s title as the best payroll software, is it the right choice for your business? It isn't the only game in town – Moorepay and Xero also have fantastic payroll software solutions.

For a handy price comparison, we recommend taking a moment to get personalised payroll software pricing quotes for your business by using our bespoke price comparison tool. This service is free, takes just minutes, and involves zero obligations on your part.

If you want to carry out further research, read on as we guide you through the best payroll software available on the market. We’ll provide insights into the differences between them all to help you find the best match for your business needs.

Save Money By Comparing Payroll Software Providers Do you currently use payroll software? Compare quotes in just minutes

Best payroll software UK: deep dives

According to our expert research, the top payroll software providers in the UK are:

  1.   IRIS – best for: small businesses needing digital resources to answer employee queries
  2.   Sage – best for: small businesses wanting an incredibly affordable payroll solution
  3.   Xero – best for: small businesses wanting to save time by automating payroll processes
  4.   Moorepay – best for: SMEs needing extra customer support, and a thorough onboarding process
  5.   QuickBooks – best for: small businesses wanting to seamlessly integrate payroll and accounting software

Whether you’re searching for the best support, pricing, scalability, or more, we’ve profiled each of these top payroll software solutions for small UK businesses to help you find the best match for your priorities.


IRIS

Small businesses needing digital resources to answer employee queries

irispayrollsoftware

Cost: doesn't publish set price plans – instead provides personalised quotes after assessing business needs

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.

Features

IRIS isn’t just an excellent managed payroll provider – it also offers payroll business software that’s user-friendly, affordable, and in our expert opinion, the best payroll software available to small businesses.

It’s ideal for smaller UK firms looking to scale as it caters for up to 100 employees. All of your company payroll data is kept securely in a centralised location for ease of access, and one particularly ingenious feature is the specialist payroll bureau – a digital resource containing key documents and guides to assist you in answering client queries.

The software integrates with HMRC, so online submissions are accurate all year round. RTI reporting and auto-enrolment are included in the service, so compliance is no issue either. And customers also reap the benefits of IRIS’s unlimited platinum phone and online support, which is incredibly helpful for first-time payroll software users.

Verdict

IRIS Business Payroll 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 in-depth, customised reporting. Just note that its pricing isn’t as transparent as competitors’.

Pros:
  • Automatic month-end P32 summary updates
  • Multiple payments and deductions, and in-depth reporting functionality
  • Unlimited platinum phone support
  • Roll back past days – including payslips
Cons:
  • Pricing isn’t transparent like other providers

Sage Business Cloud

Small businesses wanting an incredibly affordable payroll software solution

sagebusinesspayrollsoftware

Cost: ranges depending on the number of employees – for example, five employees = £7 per month (first three months 75% off = £1.75)

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.

Features

The Sage Business Cloud has an abundance of features to make payroll as simple and efficient as possible, and all for an incredible price. The software is scalable and can manage payroll for up to 100 employees, which is great for budding entrepreneurs aiming to grow quickly in a short space of time.

The multi-user access feature is handy if multiple employees are managing the payroll processing, as each individual is provided a unique login for added security. For those new to the payroll game, you can give live access to a qualified accountant to provide additional support and help finalise things.

Another really useful element, especially if you are occasionally prone to clumsiness, is Sage’s built-in corrections feature that allows you to amend data without rerunning pay runs. Other providers require you to use a backup to undo any changes to a finalised payroll period, which is a pain if you don’t have one saved.

Verdict

Sage’s Business Cloud software comes with 24/7, year-round expert support and is currently discounted at 75% off for the first three months, making it an excellent choice for small business owners. You can even trial the software free for 30 days before making any decisions, which is plenty of time to test out its wide range of features.

Pros:
  • Expert 24/7/365 support from Sage payroll specialists
  • Fully HMRC-compliant software
  • Simple and efficient – can complete pay run in four simple steps
  • Free 30 day trial
Cons:
  • Setup is complicated and time consuming – will need to make use of the 24/7 access to a Sage expert
Want to quickly compare bespoke quotes from the best payroll software providers in the UK?

You're already sold on using payroll software for your business, but now you just need to ensure you get the best possible deal, as the last thing you want is to be tied into an expensive contract with a poor provider.

This is where we come in. Our free comparison tool will match you with the right provider for your company’s needs, providing you with direct payroll software costs that you can easily compare.

All you have to do is fill out a few details, and we will take care of the rest.


Xero

Small businesses wanting to save time by automating payroll processes and streamlining workflows

xeropayrollsoftware

Cost:

  • Starter plan = £17 per month (includes accounting software)
  • Standard plan = £31 per month (includes accounting software)
  • Premium plan = £38 per month (includes accounting software)

Xero made a name for itself with its industry-leading accounting software, and has since branched out to offer a number of products suited for small businesses and entrepreneurs, including its impressive payroll software.

Features

In 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.

The employee self-service feature is 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.

Verdict

The best thing about Xero is the fact you can manage your payroll and accounting seamlessly in one system, saving you time and resources. Its automation features are unrivalled, and the Xero Me mobile app is an excellent, easily accessible feature. The whole process of payroll is made easy with Xero software, and it really shows.

However, one potential drawback in using Xero for your payroll software is that it’s only available on a Xero accounting plan – which could be a problem if you already have existing accounting software.

Still, the fact the starter plan comes at an incredibly affordable £12 per month, and includes three months of payroll software for free (for up to five employees), should silence any doubts.

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
  • First three months are FREE (up to five employees) – then £5 per month
Cons:
  • Must be using Xero accounting software to access the payroll service

Moorepay

SMEs needing extra customer support, and a thorough onboarding process

moorepaypayrollsoftware

Cost: doesn't publish set price plans – instead provides personalised quotes after assessing business needs

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.

Features

Moorepay’s 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. As Moorepay is cloud-based, you can access and process payroll on the go, which is ideal for remote and hybrid working teams. The training and onboarding process is thorough, and guarantees to get you up and running with the software effortlessly.

Moorepay is HMRC compliant, BACS approved, and auto enrolment ready. Plus, its people analytics feature gives you access to real-time, insightful dashboards and data-driven graphs. So you can rest easy with an overarching view of what is going on with your employees. 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.

Verdict

If we are being honest (which we always are), Moorepay’s payroll software is more suited to medium-sized businesses, not micro-sized. The primary reason for this is that the cost simply outweighs the benefits for businesses with two to 30 employees (despite Moorepay not publicly sharing its pricing plans).

What’s more, once you scale into the SME category, Moorepay’s payroll software is a serious contender for the top spot. Its useability, bespoke setup and onboarding process, and excellent support and customer satisfaction rating (Trustpilot score of 4.5/5 stars) all make it an attractive choice for businesses planning to scale.

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 five to 30 employees, as the cost of the service outweighs the benefits
  • Pricing isn’t transparent
We get it, there are plenty of providers offering similar products, and it can be a pain reading through reviews and analysing comparison tables...

So why not answer a few simple questions about your business using our easy-to-use comparison tool, which will tailor your specific needs to the best payroll software available.

You'll receive bespoke quotes and additional product information to make it easier to select your best-fit provider. Plus, it only takes a minute.


QuickBooks

Small businesses wanting to seamlessly integrate payroll and accounting software

quickbookspayrollsoftware

Cost:

  • Simple Plan = £10 per month
  • Essentials Plan = £14 per month
  • Plus Plan = £19 per month

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…

Features

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.

The self-service employee portal has increased functionality compared to other software providers, enabling your staff to enter their address, access payslips, enter timesheets, request leave and even submit expenses.

Another great feature of QuickBooks payroll software is its CIS (Construction Industry Scheme) capabilities – it can automatically calculate contractor or subcontractor deductions and file your CIS taxes directly to HMRC, all at no additional cost. This is great for small construction firms or businesses working regularly with contractors.

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 small businesses. The CIS capability is a particularly handy feature, and its functionalities, including both the employee portal and the employee management service, give you total control over every aspect of payroll.

Integration with QuickBooks’ accounting software is required in order to access the payroll offering, but honestly, why would you not want to manage all of your finances in one place? Especially at the competitively affordable price of £10 per month (with the Simple Start plan).


Payroll software: key features comparison table

 IRISSageXeroMoorepayQuickBooks
HMRC and RTI compliant
24/7 supportXXX
BACS payments
Auto-enrolment
Standalone softwareXX
Transparent pricingXX
Free trialXXX
Mai-Po Wan, Payroll Product Director, Sage discusses the features you want from payroll software:

“Choosing payroll software is vitally important when it comes to managing finances and staff effectively. With the right payroll solution, keeping staff paid on time and in a compliant way can be done seamlessly.

Businesses should look for solutions that simplify the payroll process by automating payroll calculations and submissions. Additionally, businesses should offer employees self-service apps where they can access and manage their personal information, such as payslips. The software should also be HMRC compliant, helping teams to get PAYE and NIC right without any hiccups.”


Next steps: roundup and comparison of the best payroll software in the UK

From our in-depth reviews, it is clear that the best payroll software available is IRIS. This reputable, established provider backs up its vast experience with an excellent payroll service offering.

IRIS is the best provider because its features are specifically tailored to make payroll processing as simple, easy, and efficient as possible. From the roll back functionality that helps correct pay run mistakes, to the automatic P32 summary updates and in-depth reporting functionality, everything about IRIS’s payroll software has the user in mind.

Sage’s payroll software comes a close second, followed by Xero – both offer strong services for different reasons. Although Sage’s platform is overcomplicated and difficult to set up, its 24/7 support and incredibly cheap price make it a solid payroll software provider. Xero’s automation is guaranteed to make your life easier, but is a bit pricier than other competitors and is only available if you purchase its accounting software.

Moorepay is an excellent choice for businesses looking to scale, but if you are planning to remain at a micro level you would be better off using Quickbooks – as long as you’re happy to integrate your accounting and payroll services together.

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 in a contract with a service that doesn’t fulfil the needs of your business, even if it is, generally speaking, 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 IRIS 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.


FAQs: payroll software

What does payroll software do?

Payroll software is an application that assists you in organising, managing and automating employee payments. It can either be an on-premises or cloud-based solution, but is typically cloud based.

The role of payroll software is to ensure you remain compliant with tax regulations and the requirements set out by HMRC. It also streamlines and automates payroll processes, so you can save time and reduce the cost of employing a large team of payroll professionals and administrators.

What should I look for in payroll software?

There are a number of important features and capabilities you want from payroll software as a small business owner. We’ve listed some of them below:

  • HMRC and RTI compliance
  • BACS payments
  • Auto-enrolment
  • Easy-to-use interface and user experience
  • Great customer support
  • Employee self-service
  • General security

Do I have to use payroll software?

According to moneyfacts.co.uk, yes you do. This is because as a business owner, you have a responsibility to report your incomings and outgoings to HMRC for tax purposes, and this includes paying your employees – even if there are just two of you.

Technically though, you don’t have to use payroll software as long as you outsource your payroll to a managed provider. We’ve reviewed the best managed payroll providers for small businesses if you want to learn more.

Ross has been writing for Startups since May 2021, specialising in sustainable business and telephone systems. He also runs the successful entrepreneur's section of the website.

He's previously written for Conde Nast Traveller and the NME and is passionate about music, sustainability, and travelling. Follow him on his Twitter - @startupsross for helpful business tips.

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