Payroll software Payroll software is an excellent choice for businesses trying to ease their payment processes Bryn Glover May 12, 2021 12 min read Our experts We are a team of writers, experimenters and researchers providing you with the best advice with zero bias or partiality. This article was authored by: Bryn Glover Editor Payroll software is designed to allow businesses of all different shapes and sizes to pay their employees quickly and efficiently, whilst helping them to comply with the necessary policies and regulations involved in payroll, taxes, and HMRC reporting. There is a wide range of different payroll software solutions available for a variety of different providers. It’s important that you choose a software provider and system that meets your requirements as well as your budget. In this article, we’ll take an in-depth look into payroll software, including the features and benefits of online payroll software. We’ll also consider what you should look for in a payroll manager software solution and go over some of the leading payroll software providers currently available on the market. Finally, we’ll look at HMRC software regulations, how RTI payroll can impact your business, and whether or not you should consider free payroll software solutions. Online Payroll SoftwareAccounting firms, businesses, and payroll bureaus are increasingly moving towards online, cloud-based payroll systems, in order to automate many otherwise time consuming tasks. Online payroll solutions are ideal for entrepreneurs and business owners who work on the move – proving a reliable, efficient, and simple way to pay your employees and manage your payroll processes, wherever you are in the world. Here are the main benefits of using online payroll software:Cloud backupWith online payroll systems, all of your data will be automatically backed up on the cloud, ensuring that you remain compliant with data protection legislation and will never lose your payroll data again. What’s more, you won’t have to worry about manually backing your data up. When you data is integrated with the cloud, it will be synchronised whenever you run your payroll or make any changes. This means you can restore or download nay of the backups to your computer at any time. Minimise adminWith online payroll software, you’ll no longer need to produce physical, paper payslips that need to be downloads and emailed, or printed and posted. Instead, employees will be able to access their payslips and other related documents via an online portal. Accessible 24/7Employers can access all employee payslips, payroll reports, and other details online 24/7, whilst employees can access their self service portal to easily view their payroll information, without having to approach the payroll team. Stay CompliantOnline payroll software automatically updates in response to changes in tax laws and regulations. This means that your data is always 100% accurate and compliant with the relevant legislation. Top payroll softwaresThere is a wide range of payroll software solutions available on the market, all offering their own features, benefits, and costs. When it comes to choosing a payroll programme, there are a variety of factors to consider, including:What features does the software offer? What features do you need?Is the software user friendly?How much can you afford to spend?What have other businesses said about the software and the provider?Does it integrate with your existing programmes?Is support included in the cost and readily available?Is it scalable?Can your employees self-service using the software solution?Is it an online or offline system?In the sections below, you can find out more about some of the most popular UK payroll companies. Take a look now.12Pay Payroll Software12Pay provides quality software for small and medium-sized companies across the UK. These easy to use, low cost solutions are designed to make managing the payroll process simpler and more effective. This payroll software provider offers three main payroll software packages:Express (free)PremiumBureauEach of these packages offers its own unique features to meet your payroll requirements and your budget. Designed to be as simple and easy to use as possible, you don’t need to invest in special stationary – 12Pay can print payslips on blank paper and prints HMRC documents, including P45s, on HMRC stationary or on blank paper. 12Pay software is also cost effective – an annual license for the Premium Edition costs £56.00. Key features and benefits include:Free for 9 employees in a PAYE yearHMRC approvedAutomates pay calculationsHandles HMRC filing including RTIUnlimited employees in each payroll for 6 pay runsRun up to 3 company payrolls for freeNo need for special stationaryOnline filing of HMRC returnsPublish communication electronically, allowing your employees to access them via their smartphone, tablet, laptop, or desktopSagepay Payroll SoftwareA well respected payroll brand that is renowned for delivering professional, reliable results, Sage offers a range of financial services for small businesses and accountants. This innovative, user-friendly software will allow you to get accurate, fully compliant payslips each pay period in just a few clicks. Absence, attachments, bonuses, expenses, holiday pay, hourly payments, National Insurance, overtime, PAYE, pensions, salaries, and student loans can all be managed with minimum hassle. Thanks to cloud-based software, SagePay can be accessed anywhere and at anytime. Manage pay runs that range from weekly to fortnightly to monthly, making sure you are fully RTI compliant. Sage's packages are designed to meet the needs and budgets of a variety of different business types, with prices starting from £5 for month, ranging to around £50 per month. Fully complaint and always up to date, this software will help to protect your business against fines and other penalties – providing you with peace of mind. Key features and benefits include:Free 24 hour customer supportPay your employees in just four simple stepsSecure payrollElectronic submission to HMRCVarious packages to suit different business sizes and typesAccurate and compliantCost effectiveHMRC approvedRTI compliantBrightpay Payroll SoftwareThis professional payroll solution has been designed with the needs of accountants, as well as small and medium sized businesses in mind. An incredibly flexible software solution, Brightpay makes it quick and simple to do what you need to do to run your payroll, regardless of what kind of employer you are. You won’t find any unnecessary limitations or restrictions on what you can do, and there are no hidden charges or additional fees. Brightpay’s payroll software has been designed to be as simple and user-friendly as possible, making the process as straightforward as possible. The expertly designed user interface gives visual priority to the most common payroll tasks, showing and hiding features as they become relevant. Key features and benefits include:Low costPayment due notificationsHMRC recognitionSupports RTIEasy-to-use interfaceUnlimited employeesUnlimited payments, additional, and deductionsPay different employees of different datesFlexible reportingFree, unlimited support by phone and emailNo hidden costs – prices includes full functionality and supportIn addition to the standard Payroll software, users can also opt for Brightpay Connect – a powerful add-on that enables the secure and automatic backup of your payroll data to the cloud and a web-based, self-service dashboard for your and your employees. Onepay Payroll SoftwareOnepay is a fast and efficient payroll method that makes payments simple, swift, and secure. Designed for the needs of businesses whose employees don’t have bank accounts, Onepay allows you to pay them without the time and expense of paying by cash or cheque.The entire process is simple and streamlines, allowing businesses to enjoy maximum benefits with minimum effort. Once they have submitted an application, each worker received an individual account number and sort code, allowing payments to operate in exactly the same way as they do when made to employees’ bank accounts. Offering a highly competitive cost-of-use, Onepay doesn’t come with any fees for activation of application, no monthly usage fee, and no minimum balance is required. Everyone’s a winner – your workers will feel truly values and get their wages reliably and in a way that works for them, whilst you can enjoy a simple, efficient , and hassle free payroll process. Key features and benefits include:Pay workers without a bank account quickly and simplyIndividual account number and sort codes for workersAllows for remote payments without workers having to visit your premisesNo fees for businesses at any stage Payments hit workers’ accounts quicklySimple application process, all workers qualifyMoneysoft Payroll SoftwareMoneysoft is a great value payroll software solution for employers, agents, and CIS contractors. Used by thousands of SMEs, agents, and CIS contractors across the UK, in the first 6 months of 2016-17, more than 1.5 million RTI submissions were successfully filed through the software. This payroll manager boasts a wide range of features, including RTI filing, Employee Payslips, Comprehensive reporting with email capability, automatic calculation of Statutory Sick, Maternity, Paternity, and Adoption Pay, Data backup facilities, and much more. Moneysoft is also auto enrolment and workplace pensions ready, and is fully compatible with all major pensions providers, including NEST, NOW:Pensions, The People’s Pension, and many, many more. After an initial free trial, Moneysoft is priced from around £56+VAT for those dealing with single employers, through to £112+VAT for multiple employer solutions. These costs include both the payroll software and on-going, unlimited customer support and there are no hidden or additional costs. Key features and benefits include:RTI compliantAuto enrolment and workplace pensions readyInitial free trialHMRC recognisedMultiple payslip designsAutomatic calculation of Tax and National Insurance Always up to date with the latest HMRC legislationSimple to useAdditional features for agents and accountants at no extra costPayroo Payroll SoftwarePayroo is a complete payroll and pension solution, allowing businesses to complete their weekly, monthly, or other pay frequency pay runs and auto-enrolment from anywhere on a PC, Mac, Tablet, or even Smartphone. The first software solution to combine both payroll and auto-enrolment functions into one, simple process, Payroo allows you to complete both functions at the same time, without the need for additional costly and time consuming software for auto-enrolment. Payroo also allows you to run your payroll securely from any Internet point, or even on the move, 24/7. The software is professionally managed and updated over the cloud to ensure that your calculations are always up to date and fully compliant. Your employees can also view their payroll accounts securely, online at any time, giving them access to their current and past payslips, P60s, andP11Ds, as well as allowing them to update their personal contact details. Key features and benefits include:Combined payroll and auto-enrolment packageHMRC recognised HMRC RTI AccreditationFully compliant with the latest tax legislationCloud basedFast, easy, and accurateNo software installationUnlimited employees supportedFully compatible with your current systemIRIS Payroll SoftwareIRIS is a leading provider of payroll and HR solutions. In fact, every day, over 335,000 businesses in the UK reply on IRIS payroll to pay approximately 2.5 million employees. Whether you’ve got 1 employee or 10,000, IRIS offers payroll solutions for businesses of all shapes, sizes, and types. From SMEs and enterprises, through to accountants, payroll bureaus, micro-businesses, and GPs, IRIS has a solution to meet your needs. With digital payslips, IRIS makes it easier than ever before for businesses to distribute their payslips and for their employees to access them. With just one touch of a button, the software can publish and distribute your payslips directly to your employees’ smartphones. What’s more, IRIS payroll software is also available in both desktop and cloud-based formats. So, if you’d rather not go through the hassle of installing the software and running payroll from your desktop, you can use the online system to fun your payroll quickly and simply from your Mac, tablet, laptop, or even smartphone, wherever you are on the planet. Key features and benefits include:Free for up to 10 employeesEasy to useDeliver digital payslips to your employees’ smartphonesvDesktop and cloud-based solutionsRTI readyAuto enrolment ready24/7 supportAward winning softwareRTI PayrollThe introduction of Real Time Information (RTI) by HMRC represented the most significant change to the PAYE system since it was introduced. Under RTI legislation, employers are required to submit information electronically to HMRC when or before they pay their employees, rather than just once a year as with the old system. Designed to make the payroll process easier to manage, RTI improves the accuracy of PAYE, reducing the need to send out corrections for overpayment or underpayments, and minimising the risk of fraud. RTI is now compulsory for all employers, meaning you’ll need to submit up to date details for all of your employees, including temporary and casual workers, as well as employees paid below the National Insurance Lower Earnings Limit. Under TRI, you will need to make four different types of submissions to HMRC inline with your payroll:Employers Alignment Submission (EAS)This is a one off submission used by HMRC to match and align your company records against the data they already hold on you. Only large employers with over 250 employees need to submit an EAS< however small and medium employers can also volunteer to submit one. Full payment submission (FPS)The most common submission type, FPS consists of the employee payments and deduction required each time a payment is made to an employee. You will need to submit an FPS every time you make a payment to an employee. It can be made on or before the date the payment is made. HMRC uses this submission to calculate how much PAYE and NIC is due from you each tax month. Employers Payment Submission (EPS)This is only submitted when you need to advise HMRC of any alteration to this liability or where you are informing them of a nil payment. You should make this submission when or before the relevant monthly or quarterly liability payment is made to HMRC. National Insurance Number Verification Request (NVR)An employee’s NI is a vital piece of information under RTI, which uniquely identifies them. An NRC submission allows employers to validate an employee’s NI number or request one if they don’t have one. With the above in mind, any payroll system you choose should have RTI capability.HMRC Payroll SoftwareWhen choosing Payroll software, it’s important too look out for a solution that is HMRC approved. As part of the approval process, HMRC tests payroll software to ensure that it can report PAYE information both online and in real time (RTI). Under HMRC guidelines, you must collect and keep records of:What you pay your employees and the deductions you make from their payThe reports and payments you make to HMRCEmployee leave and sickness absences Tax code noticesTaxable benefits and expensesPayroll Giving Scheme documents, including the agency contract and employee authorisation forms.Your records must show that you’ve reported the necessary information accurately. You also need to keep your records for 3 years from the end of the tax year they relate to. During this timeframe, HMRC may ask to check your records to ensure that you’re paying the right amount of tax. If they find that you aren’t keeping full records, HMRC has the right to estimate what you have to pay and charge you a penalty of up to £3,000. Of course, your records might be lost, stolen, or destroyed. If this happens, you need to inform HMRC as quickly as possible, letting them know that you don’t have any records and that you can’t replace them. You will be expected to recreate your records as best as you can and HMRC might be able to provide assistance if you aren’t sure how much you have paid your employees. You must inform HMRC if your final payroll report of the tax year includes figures that are:Estimated – that you want HMRC to accept as finalProvisional – that you’ll update later with actual figuresInvesting in HMRC approved software ensures that you will be able to comply with the above guidelines and regulations. Free Payroll SoftwareMost major payroll software providers offer a free trial period, typically lasting 30 days. This gives you a great opportunity to explore the software and discover whether or not it will work for your business. However, after this trial period, many software solutions involve a fee – whether it’s monthly or annually. Although the payments involved in paid-for payroll software can be extremely affordable, if you really don’t want to the pay, there are a number of totally free software solutions on the market. However, it’s important to note that these free solutions usually only cater for up to 10 employees. In addition to this, paid payroll software solutions usually offer a number of benefits over free payroll software, including: More reliableMore high performance featuresCan be used for more employees – free options usually have a low limitNo limits – many free payroll software solutions have limitations that lead to unexpected or hidden costs further down the lineOf course, fee payroll systems can be hugely beneficial if you’re a small company that simply can’t afford to invest in a paid-for system yet. However, it’s well worth considering the benefits that this investment can bring to your business. Compare payroll software quotesThe information on this page should help you to better understand what you can and should expect. For information that is tailored exactly to your situation though, you should speak to suppliers today – Startups can help with this.To compare quotes from top UK payroll companies, simply complete the form at the top of this page. This process is free, quick and easy, and it could save your business both time and money.[startups_cta type=”payroll” url_1=”https://webforms.startups.co.uk/payroll?a=1″ url_2=”https://webforms.startups.co.uk/payroll?a=2″] Share this post facebook twitter linkedin Bryn Glover Editor Bryn Glover has been Editor of Startups.co.uk since 2017. Running the site's content strategy, Bryn spends a lot of time speaking to entrepreneurs and preparing for Startups' annual editorial campaigns.Having worked in journalism for just under a decade, Bryn wrote for sites like The Times, Reader's Digest, Independent and Times Higher Education before moving into the small business world.