Best Payroll Services for Small Businesses

Explore all the payroll services for small businesses.

Updated: April 9, 2024
Matt Crabtree

Written By

Matt Crabtree

 

As a small business, it’s an exciting time when you can onboard new employees. Expanding your team is an excellent sign that your business is successfully growing. Managing a team, handling employee data, and working out payroll services can be challenging.

In-house services are ideal if you're in the early stages of your business. However, payroll gets more complicated as you grow your business.

Payroll outsourcing can save you a lot of time and effort. How many employees you have will determine which payroll solutions best suit your business. You can seamlessly manage your employees and finances by using online payroll services.

In this article, you'll learn all about payroll software, and we'll introduce you to payroll services designed for small businesses.

ServiceScoreRegister
1. PayEscape★★★★★Click Here
2. Moorepay★★★★★Click Here
3. IRIS Payroll Professional★★★★★Click Here
4. MHR Global★★★★Click Here
5. ADP UK★★★★Click Here
6. TopSource Worldwide★★★★Click Here
7. One Advanced★★★★Click Here
8. Sage Payroll★★★★Click Here
9. Xero★★★★★Click Here
10. ClearBooks★★★★★Click Here

What Is a Payroll Service Provider?

A payroll service is a company that assists with or runs all aspects of payroll on behalf of another business.

They run payroll all aspects of payroll services and host the payroll software. Payroll services are well-versed in compliance, paying your employees accurately and dealing with anything pay-related. 

Payroll outsourcing means hiring a third-party entity to cover payroll solutions. You can employ payroll service providers to do part of payroll services or take over the entire responsibility. Usually, there is an option for how involved you want the provider to be in your payroll matters.

Outsource Payroll Services: Pros and Cons

There are pros and cons of payroll outsourcing to payroll service providers.

We've compiled a list to help you decide which payroll solutions to choose.

Pros

✔️ Saves time: Payroll is time-consuming, especially for a small business. If you hire a third party, you will allow yourself to focus on other critical business areas and list any potential administrative burden you would have from payroll duties. Also, if your employees have any questions or issues, payroll providers can dedicate time to help them.

✔️ Cost saving: An in-house payroll service can get costly as you'd have to hire a dedicated account manager, as well as payroll costs for payroll software and other tools needed for processing payroll. Payroll outsourcing will save you money depending on the payroll service you choose.

✔️ Compliance reporting: Payroll service providers are well-versed in labour codes and legislation, so they can help you remain compliant.

✔️ Prevents mistakes: A payroll software specialist will have a dedicated team handling your payroll accurately, so there will be fewer mistakes than if you were to try to do it yourself.

Cons

❌️ Sharing employee data: You'll have to share employee data with the payroll provider, such as confidential and sensitive information.

❌️ You won't be able to make changes: If information is missing or you need to check payroll, you may be unable to access it whenever you want. You'll have to request access and changes with the payroll provider. However, some payroll services allow custom reporting and editing that won't affect other payroll tasks.

Best Payroll Services for Small Businesses — Reviews

Here are 10 best payroll services for small businesses.

1. PayEscape: HR and Payroll Duties

  • Price range: £53 base per month plus £3.20 per employee
  • Fully managed service: Yes
  • Available as DIY software: Yes

If you're looking for a payroll solution that does it all, PayEscape offers cloud-based payroll services, Human Resources, and Time and Attendance solutions for businesses operating in the UK.

PayEscape removes the administrative burden from your workload and delivers simple and effective Payroll and People Management solutions.

The cloud-based payroll software manages all aspects of payroll, including calculating payroll taxes, filing with HMRC to contain all components of author enrolment and more. This payroll solution will deal with reimbursement and pre-tax benefits.

This multi-purpose solution lets you manage all aspects of your HR administration. You can approve and monitor holidays, record working time, calculate wages, and allocate time and staff expenses to clients, projects, etc.

You can choose a monthly plan of £53 base per month plus £3.20 per employee or a weekly plan of £15 plus £1.32 per employee. The monthly plan is a rolling contract so that you can cancel it anytime without penalties. Before you commit to managed payroll services, you can book a demo.

2. Moorepay: 100% Cloud-Based Managed Payroll Services

  • Price range: Personalised pricing plans
  • Fully managed payroll service: Yes
  • Available as DIY software: Yes

If you're looking for a payroll system with payroll and HR services in one, consider Moorepay.

The payroll software is built on Microsoft Azure technology. Hence, it's easy to use with a simple and logical menu structure, has an intuitive interface and can be integrated with other systems.

Software security is monitored continuously, and all payroll data is stored securely. As Moorepay is 100% cloud-based, users can access it from most devices, including a mobile app.

Moorepay takes care of all aspects of payroll, including sending your complete payment submission (FPS) to HMRC. You can benefit from extensive advice offerings, a prominent HR and people management solutions suite, and tax-related educational resources. Moorepay has CIPP Payroll Assurance Scheme (PAS) accreditation.

You can do custom reporting with Moorepay. However, it doesn't provide an open API, so integration is limited, so you would have to switch from your current payroll system to Moorepay.

3. IRIS Payroll Professional: Flexible Payroll Solutions

  • Payroll service cost: Personalised quotes after assessing business payroll needs
  • Fully managed payroll service: Yes, but this is optional
  • Available as DIY software: Yes

You can outsource payroll to Iris Payroll Professional to take over your payroll system and do everything for you, or they offer training so someone on your team can do it for you using their payroll software. Iris offers flexible and powerful payroll solutions.

All UK small businesses can use Iris; they're also an international payroll service provider with experts across 135 countries to help your global payroll be accurate and compliant.

Save time with automation and seamless integration with your existing systems with IRIS's cloud-based payroll software. The software is ideal for PAYE, CIS, Off-Payroll Working and Umbrella companies. As an outsourced payroll service, IRIS offers dedicated support from certified payroll professionals and guaranteed accurate, secure and compliant payroll.

Additionally, there is an accessible Employer Portal that gives you complete visibility of payroll services. Your employees will have 24/7 access to their payslips and pension documents through the IRIS e-payslip portal.

Payroll services cost varies depending on your business. IRIS offers a personalised package to each business after assessment. There are no setup fees for this payroll solution.

4. MHR Global: Have a Combination of In-House and Outsourced Payroll Services

  • Price range: Personalised to your business
  • Fully managed Payroll solution: Yes
  • Available as DIY software: Yes

Automate and simplify HR, finance and payroll processes with MHR Global's software solutions.

MHR offers a highly detailed reporting platform, educational material, and accredited expert payroll advice. You can access the software from a mobile app. You can customise reports and share payroll data across different systems.

MRH offers you the choice of in-house, outsourced payroll or a combination. The flexibility is excellent for whatever stage you're at with your business. So, if you have a dedicated payroll manager, they can work with the new system for running payroll.

MHR also allows CSV exports of pension contribution data by pension scheme, payment dates, and payrolls so you can manage your employee's pension information internally.

MHR offers a free team of experts to help you with your investment case for outsourcing payroll to help make the transition from in-house solutions smoother. You can access customer service via phone and live chat. You can book a free demo before you sign up.

5. ADP UK: HMRC Recognised and Compliance-Ready Services

  • Price range: Personalised to your business
  • Fully managed payroll service: Yes
  • Available as DIY software: Yes

If you want more than just a payroll service, ADP offers additional software and help with HR and recruitment with beneficial management solutions.

ADP simplifies HR and PR services with accessible software with built-in compliance and over 8,3000 compliance professions to ensure your business is compliant.

There is a global implementation team across 140 countries. BACS approved payroll solutions, and HMRC recognised the software to pay staff salaries and benefits and make dedications on your behalf.

There are payroll services and HR solutions for businesses of every since, from small to global. With ADP, you can benefit from payroll services, time and attendance tracking, HR insights and more.

You can customise reports and take advantage of tax education resources. Customer service is available via phone and live chat. There is a mobile app available for employee self-service and access to payslips.

6. TopSource Worldwide: Pay Your International Employees

  • Price range: Personalised to your business payroll needs
  • Fully managed payroll solution: Yes
  • Available as DIY software: No

If you're looking for a payroll provider who offers additional features, check out TopSource Worldwide.

They specialise in payroll and recruitment and are a HR service provider. If you're a business with a team spread across the globe, TopSource enables payments for international employees. You can employ and pay anywhere you want.

Gain access to CIPP-accredited expert payroll advice. TopSource offers global employment solutions that go beyond compliance. You can benefit from centralised account management with a single point of contact, access local HR and payroll experts in every location and onboard new global talent more efficiently.

With teams worldwide, you and your employees can reach out for support whenever needed.

7. One Advanced: Beginner Solutions for Small Businesses

  • Price range: Personalised quotes
  • Fully managed payroll service: Yes
  • Available as DIY software: Yes

If you're just starting a small business, One Advanced provides a beginner solution for all small businesses.

Advance provides an official cloud-based payroll software that also allows custom reporting. You can improve payroll efficiency with super-speed processing and automation. 

The payroll software is available for Cloud and on-premise environments for your business needs. The user-friendly software automatically generates reports with intuitive reporting and dashboards, easy-to-use reporting features and employee self-service capabilities.

You can strengthen your payroll knowledge with live training and CIPP-accredited expert advice. You can also utilise HR software to help scale your operations without needing multiple service providers. 

You can also use One Advanced’s pensions auto-enrolment software for your employee’s pension, so you have payroll and pension in one place.  Advanced doesn't provide an open API, so it may be challenging to integrate your current software if you have one.

8. Sage Payroll: Software Designed for the End User

  • Price range: £8 per month to £106 depending on the employee's amount
  • Fully managed payroll service: Yes
  • Available as DIY software: Yes

If you're a small business worried about using complicated software, Sage Payroll has been designed with the end user in mind.

You can take care of your employee's pay, tax, and pension contributions with a dashboard tailored to suit your needs. Sage offers accounting and payroll software for small businesses and other tools.

The software allows you to file pensions, P60 forms and payslips. A built-in corrections feature will enable you to amend data without rerunning pay runs. Sage's Payroll services integrate with Equifax, making applying for loans and mortgages easier, which will help your staff if they ever use it.

A free 30-day trial is available to see if the payroll system fits your business. Sage Payroll is fully HMRC-compliant. Sage Payroll can be tricky to set up, but they have a support team to help you if you need it.

9. Xero: Integrate Payroll with Xero Account

  • Price range: From £5
  • Fully managed payroll service: Yes
  • Available as DIY software: Yes

You can customise Xero's payroll software, which is directly integrated into the Xero accounting software, if you want both payroll services and accounts all in one place. You can automate tax, pay and pension calculations.

The payroll is managed on cloud software and is entirely fully HMRC compliant. You can keep accurate pay records and submit payment and dedication details to HMRC each payday.

Your employees can view payslips, request leave, and submit timesheets directly to Xero, saving you time on admin. There is fast pension re-enrolment; the process is automated to reduce admin and saves you time.

You carry Xero for free to help you decide if it's the right software for your business. You can have unlimited users, and you can control their access. Xero allows you to track employee benefits and reimburse any business expenses. 

10. ClearBooks: Add Unlimited Amount of Employees

  • Price range: From £2.70 per month
  • Fully managed payroll service: Yes
  • Available as DIY software: Yes

If you're a small or medium-sized business, ClearBooks is a simple and affordable solution for managing finances. You can run payroll and manage employee leave with ease.

ClearBooks offers online payroll and HR software that makes calculating pay, producing payslips, tracking employee absences and reporting to HMRC easy. You can also pay for additional accounting services.

You can create payslips, P45s, and P60s in seconds and customise them with your company's logo and colours. You can send out your employee's payslips via email, print or grant them access to view forms online with the employee portal. If you use ClearBooks accounting, it can be integrated with the payroll systems.

Your plan is flexible; you can add as many employees as you like and get an instant quote on their website. There is a free trial you can try out to see if the software works for you.

How to Choose a Payroll Software

We shared a review of all the top payroll services for small businesses.

Still, the only way you can know which payroll outsourcing services will work best for you is by considering the following factors:

  • Internal control: A good payroll outsourcing provider will be well organised, structured and able to commit to ensure quality software performance. There should be little to no mistakes in generating data and making payments. A well-run payroll service provider provides a smooth overall process for a small business.
  • Compliance: You must choose a payroll provider that is on top of regulations and can ensure your payroll services are adjusted to any changes to help you remain compliant. All UK businesses running payroll must fully comply with Real Time Information, so stick with a payroll specialising in UK businesses and compliance.
  • Pricing: Comparing payroll service prices is an excellent place to start when looking at payroll providers. You want to pick the best-outsourced payroll that makes the most of your money. You want to ensure you complete full services for small businesses looking for the whole package from a payroll company.
  • Best-in-class technology: Online payroll services should be high, have high functionality, offer employee benefits and administration access, and provide data backup and disaster recovery.
  • Customer service: Good customer service is vital for successful payroll outsourcing. You need to know who you're working with is communicative, supportive and happy to help with payroll enquiries. Reading reviews and references shows you if a payroll service has good customer service.

With all of the above factors in mind, you can compare the different payroll service providers and find the one that suits your business best.

What Are the Payroll Processing Stages?

Whether you're choosing to do your payroll in-house or hire a third party, you must understand how payroll works and how you can expect the payroll process to look.

There are several steps to the payroll process, and you'll need to become more accustomed to them if you plan on expanding your team any time soon.

  • Decide pay cycle: When you start employing people, you must decide the pay frequency for you and your staff. Most employers choose to do a weekly or monthly payment cycle.
  • Collect relevant documents: You will need employee information, tax documents, pension details, and bank account information for everyone you want included in your payroll. If you outsource payroll, you must share employee data with them to ensure everyone is paid correctly.
  • Calculate gross pay: You must calculate the gross pay for all your employees. Gross pay is the amount the employees have earned before tax deductions.
  • Determine net pay: You will need to withhold taxes, pension, national insurance and any other dedications from the gross pay, and your employees will receive the net pay.
  • Initiate payment: If you're running payroll in-house, you must send your employees payslips and pay your employees manually with a bank transfer. If you hire a third party, they will pay your employees and give them access to payslips.
  • Pay taxes: You must pay all taxes to HMRC and wherever other deductions go. Again, if you're outsourcing payroll, they will handle this and ensure you're compliant.
  • Keep records: Always record your payroll, including taxes, transfers, payslips and all deductions.

Final Thoughts

Outsourcing payroll saves you a lot of time so that you can focus on other business areas. There is a lot that goes into payroll. As you see from the previous section, payroll is no easy feat.

You can hire a team of experts to take the burden off your shoulders, and they'll ensure your payroll is accurate and HMRC-compliant. You can increase business growth with most payroll services because many offer additional services like HR tools and other management tools.

Related Guides:

Best Payroll Services for Small Businesses: FAQs

Should Small Businesses Outsource Payroll?

What Are the Benefits of Outsourcing Payroll Services?

Do I Need a Payroll Department for My Small Business?

What Are the Drawbacks of Outsourcing Payroll Services?

Which Payroll Company Is Best for a UK Small Business?

How Do I Choose a Payroll Provider?

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