Best Free Payroll Software

Simplify the process of managing employee finances with free payroll software.

Updated: May 18, 2024
Matt Crabtree

Written By

Matt Crabtree

CompareBanks is reader-supported. When you click through some links on our site, we may earn an affiliate commission. Learn more

It goes without saying that payroll management plays a pretty integral part in any business, big or small.

Generally speaking, this is normally quite a complex process, too, depending on the size of your business — that's why so many companies turn to payroll management software.

Whether you need something that manages mandatory employee forms, auto enrolment, calculates and disburses employee salaries, deducts taxes and benefits, or anything other payroll tasks, this kind of software can be a huge game changer.

The best part is that you don't even need to have paid payroll software features for most of these tasks; the free versions work just fine.

So, throughout this article, I'll be taking a closer look at the best payroll software options that are currently available are, what payroll is, and how the software actually works.

ProviderScoreHMRC CompliantDetails
1. Primo Payroll★★★★★YesClick Here
2. HMRC Basic PAYE Tools★★★★★YesClick Here
3. IRIS Payroll★★★★★YesClick Here
4. Shape Payroll★★★★★YesClick Here
5. EnrolPay★★★★★YesClick Here
6. Zelt★★★★YesClick Here
7. eSmart Paycheck★★★★YesClick Here
8. 12 Cloud Payroll★★★★YesClick Here

Best Free Payroll Software Providers — Reviews

It's worth noting that many of the free options out there when it comes to payroll software providers are fairly similar — it's only when you start paying for the service that you notice some of the more significant differences.

Having said that, let's dive into some of the top free payroll software out there currently.

1. Primo Payroll

First on our list, we have Primo Payroll, which is a fairly dynamic option that's made especially for small and medium-sized businesses.

Let's take a look at what kind of features you can expect with this platform:

Key Features

Comprehensive Employee Data Management

As with all of the options on this list, Primo Payroll provides you with an employee database where you can store and manage any kind of employee information. Whether it's basic personal details or some of the more specific preferences regarding tax, the overall HR process is simplified here.

Precision Tax Calculations

They also automate your tax calculations so that they're compliant with HMRC regulations. Because of this, you can be sure that deductions and contributions are calculated accurately, which naturally reduces the risk of any costly tax-related issues.

Seamless Pension Integration

In addition, the platform also integrates with your pension provider, meaning that both employer and employee contributions will be accounted for accurately and transferred to the pension fund to save time — not to mention how it helps enhance pension compliance.

Responsive Customer Support

Despite being a free solution, Primo Payroll actually doesn't skimp on the level of support that it offers.

2. HMRC Basic PAYE Tools

Next on our list, we have a platform that comes from HMRC itself, making it one of the go-to payroll options out there for any kind of UK-based business.

Given that it's designed by HMRC, its primary goal as a platform is not only to simplify payroll obligations but also to ensure you're fully compliant with all of your tax-related responsibilities.

Key Features

Thorough Employee Record Keeping

You'll receive a reliable platform for managing employee records with Basic PAYE tools, from employee records to ensuring you use the correct tax code. In addition, it also generally helps with maintaining your employee database, which is obviously crucial for payroll accuracy.

Effortless Payslip Generation

Basic PAYE Tools make it easy to create payslips, too, so you can always be sure that there's clarity and precision when calculating your employees' wages.

Automatic Tax Code Updates

Given how frequently tax codes can change, it's especially handy how the platform automates the process of updating tax codes on your behalf so that there are fewer errors that stem from outdated information.

Security and Compliance

Lastly, unlike any of the other options on this list, Basic PAYE Tools prioritises secure data transmission and always guarantees compliance with tax regulations since it's actually developed by HMRC.

Put simply, this means your data is always protected and you can trust that you're staying compliant with HMRC standards.

3. IRIS Payroll

Moving forward, we have IRIS Payroll, which is another fairly dependable option when it comes to free payroll software. Unlike some of the other options on this list, they cater to businesses of various sizes and industries, so you're not only receiving quality features but scalability, too.

Key Features

Professional Payslip Generation

IRIS Payroll is fairly similar to our other software choices since it lets you create payslips for all your employees with ease.

Comprehensive Employee Database

Again, like any kind of payroll software, you'll always be receiving a secure and organised database that you can use to store and manage your employee information so you have quick access to important information.

Real-Time Information (RTI)

This software also supports something called Real-Time Information (RTI) reporting, which essentially means your business always remains compliant with HMRC regulations since it submits data in an accurate and timely manner.

Regular Updates

Finally, IRIS Payroll Basics always stays up-to-date with all the latest payroll and tax requirements, meaning the software is always aligned with evolving regulatory standards.

4. Shape Payroll

Shape Payroll is another quality option here, but it's worth getting out of the way immediately that you can only really utilise it if you're looking for a software to pay yourself as a sole trader — like you would if you were running a side hustle, for instance.

It's not that you don't have the options of using this particular software for large businesses with more employees, it's just that they only have a couple of different subscription plans and the free one that we're discussing only lets you submit one payroll for one employee each month (though this includes three separate payslips).

If you do, however, need more capabilities, you'll need to pay the £10 monthly fee and upgrade to their Pro plan. With that in mind, this is still an incredibly easy platform to use that can be set up in basically no time, regardless of what your level of experience is in using these sorts of tools.

Key Features

Encryption

Shape actually encrypt all the information you include on the platform not once, but twice — so this means things like your debit card, bank account details, and even other employee information (if you decide you wanted to upgrade your plan) are incredibly hard to crack into — not to mention that you'll have Shape's security team working around the clock to keep you safe and make sure the servers are still up and running.

Efficiency

Anyone who's ever tried to create Employer payment summaries or submissions will know how costly some of the mistakes can be if you enter any of the day correctly, so Shape automatically does it for you which can save a lot of time.

5. EnrolPay

EnrolPay have a few plans for you to choose from, but Self Service, which is their free plan we'll be talking about, is a quality option if you're working in either hospitality or retail in particular since it's a fairly simple platform that doesn't really require any specialised IT department in your business to get the most out of it.

You'll be able to cater for up to 10 Employees with the Self Service plan, and you're all able to access it on a range of different devices — whether you prefer viewing from your computer or smart phone.

Key Features

Plenty of Customisable Options

If you need to amend payroll before you've actually submitted your Full payment submissions, EnrolPay has a tool called rollback which lets you do just that — as well as something called write-back which is for fixing any incorrect information that you've already sent to HMRC.

As touched on, this can be especially useful for any business working in the hospitality or retail industry since you'll often be working with either temporary or part-time staff who have fluctuating working hours.

Communications App

This is actually a fairly unique feature that definitely doesn't need to be included in payroll software — let alone in the free plans where you're kind of expecting most of the features to be reduced anyway.

So, the fact that EnrolPay comes with its own messaging app that lets you and your employees safely communicate with each other is massively convenient, because while you probably already have some sort of software you talk to each other on, it's unlikely it'll have an audit trail for all of your conversations.

As a result, this'll save you a bunch of time as any payroll related queries that your staff might have can be asked directly on the same platform you're using to process them.

6. Zelt

One of the main reasons we found Zelt interesting is that despite it being a free platform, they seemingly have a way better range of tools and services than a lot of the other free options we've covered on this list — strictly talking about the free plans, of course — all while coming with an incredibly easy user interface to navigate.

Zelt works as more of comprehensive HR software, but specifically in the United Kingdom, you'll be able to use their Payroll tools that lets you run payroll completely on your own and avoid using an accountant or any other specialised software to do it for you.

Like most of the other options, it basically works by taking all the employee data that you’ve entered into the software — including things like the hours an employee has worked, what their benefits/pensions are, etc. — and it'll calculate all of the taxes automatically and what the net pay per employee is. Afterwards, you're left with nice organised payslip and can file your taxes smoothly with HMRC.

Key Features

Seamless Integration With the Rest of Your HR Tools

Zelt connects directly to whatever accounting software you're already using, pension providers, and also HMRC itself — ultimately making your payroll processes a lot more simplified and easier all round.

Completely Automated

When you're using Zelt, you'll be able to run payroll within literally just a minute from whenever you started to the time that your staff actually receive their salaries.

7. eSmart Paycheck

This is one of the older options we'll be covering today as it was founded almost 30 years ago back in 1996, so whenever you see a company with this much longevity you know they must be doing something right.

Crucially, the software is completely fee if you're only running a small business without too many employees, but like most payroll providers in general, you'll have to pay a fee if you need to accommodate for a bunch of employees.

The exact price you'll pay generally depends on how many staff members you're including, but they'll all be able to access the platform and use everything on there once they've been permitted.

Fortunately, the software is super easy to use as well, as you literally just need to spend a couple of minutes and you can edit all the payroll data for your employees.

Key Features

Automation

eSmart Paycheck lets you calculate all your employees' payslips automatically, so this can be an excellent way of not only speeding your overall payroll process up but completely eliminating the possibility for human error, too.

8. 12 Cloud Payroll

12 Cloud Payroll is another cloud-based system that doesn't sacrifice any reliability or features just because it's a free service. Like most of the options we've covered on this list already, 12 Cloud Payroll is really best suited for small businesses in particular, but that doesn't mean you can't also use it if you're running a slightly larger business — just keep in mind that you'll have to upgrade to one of their paid plans if your company has over 10 employees.

Your business can take advantage of a bunch of different services with 12 Cloud Payroll, including things like handling RTI receipts and returns. In addition, you've got the option of linking your payroll with whatever HR or accounting software you use for the rest of your business, so this can be pretty useful for keeping everything in one place.

Aside from this, all of your employees have the option of printing out their own ePayslips with 12 Cloud Payroll if they need to update any of their own records.

Key Features

RTI Compliant

RTI compliance can be an issue with these sorts of software providers sometime, so it's good to know 12 Cloud Payroll is fully RTI ready — simply sign up for an account online and you'll be able to have your Internet Payroll ready to use in pretty much no time.

Rollback Feature

Similarly to EnrolPay which we discussed earlier in the article, you'll be able to use the rollback feature 12 Cloud Payroll offers if you need to either reverse or delete incorrect pay data that you've accidentally entered entirely. Then, you can simply just re-submit the pay data once you've mended it so you don't get in any bother with HMRC.

Back-Ups and Reports Can Be Exported

12 Cloud Payroll already comes with a database management system that holds all of your pay data for around 3 years, but if you're uncomfortable with leaving it on their platform for whatever reason, you're also able to export anything you need into CSV files so they can be saved on your local devices instead.

Again, this sort of thing shouldn't really be necessary as 12 Cloud Payroll already holds the data for you, but it can definitely provide some peace of mind if you like to back important data like that up.

What Is a Payroll?

Put simply, the term ‘payroll' refers to the total amount of money that your company pays to its employees during a specific period, usually monthly. This includes things like wages or salaries, bonuses, commissions, and any other deductions, too — from taxes and benefits to retirement contributions.

So, payroll management essentially consists of all the various tasks that are associated with processing and distributing some of these payments.

These tasks can be a lot for businesses to handle sometimes, so many people opt for some kind of software to streamline the whole process. Still, what sort of thing can you expect from this kind of software?

How Does Payroll Management Software Work?

As touched on, payroll management software plays a big role in automating, and therefore streamlining, most of the tasks that are involved when you need to process payroll.

Let's take a closer look at how these platforms actually work:

Employee Data Management

Payroll software lets you store and manage different kinds of employee information, whether it's personal details, bank account information, tax withholding preferences, or general employment history.

Naturally, this is incredibly useful since you no longer need manual record-keeping — not to mention how easy it is to edit employee records.

Time and Attendance Tracking

Some of the better payroll systems out there include time and attendance features, too, so your employees can clock in and out of work electronically.

You can then use this kind of payroll data when you're calculating wages, given how easy it is to take their regular hours and overtime into account.

Benefits and Deductions

Aside from simply storing your employer payment summary, you can use the software to set up and manage various kinds of employee benefits you might offer — health insurance, retirement plans, or other kinds of deductions, for instance.

In fact, this kind of accounting software calculates the deductions automatically, so you don't have to worry about manually deducting them from your employees' pay cheques.

Payroll Processing

So, once you've all the necessary data to the software, it'll calculate things like employee salaries (including any bonuses or commissions) and then generate pay cheques or direct deposits, however, you prefer it to be formatted. This keeps track of paid time off and leave balances, too.

Tax Filing and Reporting

Depending on which payroll software you've chosen (although many of the free alternatives do this as well), you can also calculate tax and NI in real time and generate tax forms and reports based off of this.

Free Payroll Software Pros and Cons

So, if you're seriously considering using this kind of software for most payroll tasks, it's worth weighing up some of the advantages and disadvantages first to remain impartial.

In the next section, though, we'll be delving into the best free payroll software that's currently available on the market.

Pros

✔️ Cost-Efficiency: Perhaps one of the most obvious benefits of using free payroll software is the amount of money you're saving by avoiding additional payroll costs with paid software. Small and growing businesses, in particular, will definitely appreciate not having to allocate a major chunk of their budget to payroll management. Of course, it's a necessary investment to make if you're running a much larger business, but generally speaking, the free software lets you allocate funds to other essential areas instead.

✔️ User-Friendly Interfaces: The majority of these platforms are built to be intuitive and easy for any kind of person to use, so even business owners and managers who have pretty limited accounting or HR experience should be able to navigate the software fairly comfortably.

✔️ Basic Payroll Functionality: Free payroll software typically allows you to run payroll management tasks effortlessly — whether that's salary calculations, tax withholding, or general pay cheque generation. So, although this is fairly basic stuff, this kind of functionality is often all a small business with straightforward payroll responsibilities needs.

✔️ Time Savings: Generally speaking, using any kind of software that automates an otherwise mundane process is going to save a considerable amount of time, and payroll management software is no different. Rather than manually calculate and enter data, you can let your HR personnel focus on other, more critical tasks, like employee relations and compliance.

Cons

❌️ Limited Features: In comparison to the paid version, free payroll software does come with a few limitations in terms of the features and capabilities they have to offer. While they definitely still cover some of your basic payroll needs, you might find that they're lacking in other advanced features — whether that's comprehensive reporting, tax support, or general integration with other HR and accounting tools.

❌️ Scalability Challenges: As we'll come into more detail later, a lot of these free platforms are built for start-ups with only a few employees, so as your business grows, its payroll needs might become a bit more complex. Because of this, free payroll software might struggle to keep up with some of your growing demands, which could mean switching to a more robust, paid solution further down the line.

❌️ Support and Updates: As you're not a paying customer, you're not exactly a priority in terms of the level of customer support or regular updates you'll receive in comparison to the paid options. So, if you encounter a few issues or need some general assistance with the software, this can naturally be a bit of a problem.

❌️ Security Concerns: Of course, many free payroll software providers still heavily prioritise security, but there can still be some concerns about data safety when using this software, even with the paid versions — especially given how sensitive the employee information and financial data you're inputting is. As such, it's paramount that you're thoroughly vetting the security measures that your chosen platform has in place before you start providing them with sensitive data.

Final Thoughts

Ultimately, you can never go wrong with software that's free, especially when you're a small business that needs to cut costs whenever you have the chance.

Still, it's worth mentioning that these platforms are only really effective when you have a limited number of employees, as scalability is an issue that extends to each of the platforms we've mentioned on our list.

So, regardless of the option that you ultimately settle on, bear in mind that you'll probably have to upgrade to a premium version further down the line.

Related Guides:

FAQs

Can I Integrate Free Payroll Software With Other Business Tools?

Are There Any Legal or Compliance Risks With Free Payroll Software?

Can I Transition from Free Payroll Software to a Paid Solution Later?

Related Articles

Best Payroll Services for Small Businesses
As a small business, it’s an exciting time when you can onboard new employees. Expanding...
Best Payroll Companies
Looking after your finances is a key component of any business. However, it is easy...
How Much Does it Cost to Outsource Payroll?
For businesses of all different sizes, outsourcing payroll is becoming more and...
Best Cloud-Based Payroll Software Companies
When it comes to HMRC compliance as a business, you need to get payroll correct....

Mentioned Banks

About Havin Bank Havin Bank, formerly known as Havana International Bank, or HIB, was founded in the United Kingdom in 1972. It received its banking authorisation the following...
Learn More