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Updated Apr 18, 2024

Best Payroll Services for 2024

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Jamie Johnson, Business Operations Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.
Best for Same-Day Direct Deposit
Intuit QuickBooks Payroll
Intuit Quickbooks logo
  • Same-day direct deposits
  • QuickBooks accounting integration
  • Easy to learn and use
Links to Intuit QuickBooks Payroll
  • Same-day direct deposits
  • QuickBooks accounting integration
  • Easy to learn and use
Best for Small Businesses
  • Well equipped for startups
  • Straightforward, affordable pricing
  • Employee self-service features
Visit Site
Links to OnPay Payroll Software
  • Well equipped for startups
  • Straightforward, affordable pricing
  • Employee self-service features
Best for Companies With a Global Workforce
Papaya Global Payroll
Papaya Global logo
  • Works in over 160 countries
  • Supports a dozen currencies
  • Colorful, intuitive interface
Links to Papaya Global Payroll
  • Works in over 160 countries
  • Supports a dozen currencies
  • Colorful, intuitive interface
Best for Growing Businesses
  • Ideal for scaling companies
  • Manages payroll and HR tasks
  • Software grows with your business
Visit Site
Links to ADP Payroll
  • Ideal for scaling companies
  • Manages payroll and HR tasks
  • Software grows with your business
Best for Added HR Services
  • Comes with payroll and HR services
  • Access to HR experts for guidance
  • Ensures compliance
Visit Site
Links to Gusto Payroll Software
  • Comes with payroll and HR services
  • Access to HR experts for guidance
  • Ensures compliance

Table of Contents

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What Is A Payroll Service?

Payroll services take over management of the payroll process for businesses, handling everything from paying employees to managing PAYE obligations. Small business payroll service providers can either take over part or all of the payroll process, allowing employers to retain whatever level of control they want when it comes to ensuring employees are paid. A small business payroll services also typically include access to payroll software tools to monitor when payroll is processed and how much it costs each cycle. While a few companies offer the flexibility of processing international workforce payments, most are focused on American employees and merely provide basic support for paying overseas contractors.

What Is Payroll Software?

The best payroll software integrates with accounting software and time and attendance systems, sharing data to reduce the need for double entry and to minimise mistakes. It’s often bundled alongside the best HR software, though the leading providers make their payroll tools available as stand-alone items. All HMRC-compliant payroll software also tracks PAYE liabilities, and the best payroll services will handle reporting paperwork with the appropriate jurisdictions. Employees can also use the best payroll software solutions to access their pay stubs and other records through an employee self-service portal or mobile application.

Payroll is often one of the largest expenses incurred by a company, and managing it can be frustrating for everyone involved. Payroll errors are time-consuming to fix and can cause employee satisfaction to plummet. That’s why many small businesses turn to payroll services for processing payroll. However, not all small business payroll services are created equal. The most basic will simply help you crunch numbers, while the best will allow you to automate your payroll and simplify tax filings. When it comes to choosing a payroll service for your business, you’ll want to select one that can handle everything you need. To help you make an informed decision, we researched the top small business payroll service providers to identify the best providers, highlighting the brands that excel in specific areas.

Find the Right Online Payroll Service for Your Business

Fill out this questionnaire to find vendors that meet your needs.

Compare Our Best Picks

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Our Top Picks for 2024
Intuit QuickBooks Payroll
OnPay Payroll Software
Papaya Global Payroll
ADP Payroll
Gusto Payroll Software
Paychex Payroll
Square Payroll
Rippling Payroll
Remote Payroll
Deluxe
Zenefits Payroll
isolved
Rating9.3/109.5/109.0/109.2/109.2/109.0/109.3/109.5/109.4/109.0/109.3/109.4/108.1/10
Best use case

Best for same-day direct deposit

Best for small businesses

Best for companies with a global workforce

Best for growing businesses

Best for added HR services

Best for employee self-service

Best for businesses of all sizes

Best for tax filing

Best for ease of use

Best for onboarding employees and contractors

Best for integration capabilities

Best for companies with a limited budget

Best for firms needing full HR tools

Free trial

Yes

Yes

No

No

No

Yes

No

No

No

No

No

Yes

No

Starting price

£35/month + £3.95/month per person

£31.50/month + £4.75/month per person

£16/month per employee

Custom pricing

£31.50/month + £4.75/month per person

£78/month + £3.95 per employee

£31/month + £3.95/month per person

£27.50/month + £4.95/month per user

£6.35/month per user + custom pricing

£23/month per employee

£35/month + £5.50/month per employee

£11/month per employee

N/A

Third-party integrations*

750+

11

7

55

189

300

250+

Yes

500+

5000 (through Zapier)

Yes

43

64

Mobile app

Yes

No

Yes

Yes

No

Yes

Yes

Yes

Yes

No

Yes

Yes

Yes

Review Link
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Our Reviews

Intuit QuickBooks Payroll: Best for Same-Day Direct Deposit

Intuit QuickBooks Payroll
Intuit Quickbooks logo
  • QuickBooks has a variety of plans at a wide range of price points.
  • The payroll software fully integrates with the QuickBooks accounting software.
  • Not all plans come with an error-free tax guarantee.
Editor's Rating: 9.3/10

QuickBooks Payroll provides small businesses with scalable payroll services that easily integrate with QuickBooks accounting software and over a dozen other Intuit product offerings. QuickBooks’ payroll features are available in multiple packages that vary due to add-ons, but each includes unlimited payroll runs, automatic calculations and submissions to HMRC, a workforce portal, payroll reports, and free next- or same-day direct deposit.

You can run payroll for employees at varying pay grades, and the software can handle attachment of earnings orders and PAYE. QuickBooks Payroll can be accessed on various devices, including through iOS and Android mobile apps. With QuickBooks Payroll, you can generate slips, calculate maternity, paternity and sick pay, set up automatic pay runs at your desired frequency and operate a time-sheet system. You also get access to the platform’s employee portal and HR features.

Building and construction firms can use the platform for CIS payments and the software will calculate and send workplace pension submissions to Aviva, NOW, The People’s Pension, Smart Pension, NEST and more.

OnPay Payroll Software: Best for Small Businesses

  • OnPay provides straightforward pricing for small businesses.
  • Businesses can run payroll an unlimited number of times.
  • OnPay doesn’t offer a mobile app.
Editor's Rating: 9.5/10
Visit Site

OnPay is a user-friendly payroll solution that caters to small businesses and startups. You can pay employees via direct deposit or paper check. Best of all, OnPay allows you to run payroll an unlimited number of times, which is helpful for businesses that run payroll weekly or routinely pay contractors for projects.

You can use the OnPay software to add employees to your payroll, set statuses, run payroll and manage paid time off (PTO). The platform includes a PAYE and benefits deduction system, and provides support for end-of-year HMRC submissions. We found its most useful tools to include compliance checklists and audits, automated workflows, and customisable document templates.

OnPay has one all-inclusive package that incorporates HR tools: The cost is £31.50 per month, plus £4.75 per employee per month. It’s also possible to impose six levels of admin permissions, including external collaborators, while integrations are offered with rivals like QuickBooks as well as platforms such as Vestwell and Mineral.

OnPay also allows users to create bespoke expense reports. The reporting tool includes the ability to add up to 50 data points to key reports, reorder columns to emphasise important data and save multiple views for different company stakeholders. We found this valuable for tracking business finances and making informed decisions.

Papaya Global Payroll: Best for Companies With a Global Workforce

Papaya Global Payroll
Papaya Global logo
  • Papaya Global can run payroll in more than 160 countries.
  • The company ensures your business stays compliant in different countries.
  • The HR services aren’t as thorough as those offered by other payroll providers.
Editor's Rating: 9/10

If you plan to expand your business globally, Papaya Global is a great option for payroll processing. The vendor can run payroll in more than 160 countries for all types of employment. That’s why it’s used by large brands like Microsoft, Toyota and Shopify.

The company’s umbrella agency service ensures that you stay compliant with the various employment laws in all the countries where you have workers. Papaya Global will even help you secure short-term or long-term work permits for employees outside their home countries.

Papaya Global doesn’t charge a base fee for running payroll; the payroll package simply costs $20 per employee per month. But if you need to use the company as your global umbrella agency, it costs £515 per month.

Papaya Global is best for businesses looking to expand internationally. If you run a small business and don’t need global payroll tools, the software may come with many features that won’t be beneficial for your organisation. An employee app, launched earlier this year, adds to its flexibility.

ADP Payroll: Best for Growing Businesses

  • ADP is one of the largest and most trusted payroll providers.
  • ADP can support your business at every stage of growth.
  • You’ll need to get a custom quote to find out specifics about pricing.
Editor's Rating: 9.2/10
Visit Site

ADP offers a scalable payroll platform that provides all the tools and features businesses need to process payroll and pay associated taxes. We found that ADP works well for companies across all industries and is a particularly good option for businesses with complex needs.

The company will run the payroll for small, medium-sized and large businesses, with dedicated plans for companies employing over 1,000 people. If you have fewer than 50 employees, there are four different plans available, but ADP customises pricing and does not reveal costs upfront. We liked ADP’s additional features, such as the employee self-service portal, direct deposit payments and onboarding tools. The advanced plans can include HR support, background checks, employee training and the ability to post job openings on platforms like ZipRecruiter.

Unlike many of its competitors, ADP has an international presence and can offer payroll services in more than 140 countries. You can run payroll on your desktop computer, on your mobile device or over the phone. ADP automatically calculates an employee’s paycheck based on their wages and time off, which saves you time and reduces the likelihood of error.

Gusto Payroll Software: Best for Added HR Services

  • Gusto offers comprehensive HR services with access to HR experts.
  • Flexible pricing plans are available.
  • The per-person pricing can get expensive for large businesses.
Editor's Rating: 9.2/10
Visit Site

Gusto has established itself as a cutting-edge payroll service provider for small businesses, especially those that want additional human resources tools. We love that Gusto seamlessly integrates with over 20 time-tracking applications and numerous hiring, performance management and learning platforms. These integrations empower small businesses to better leverage Gusto’s native onboarding, benefits administration and payroll features. With these advantages and more, Gusto stood out as our top choice for the best online payroll service with added HR services.

Gusto’s cloud-based software is easy to use and comes with direct deposit, new-hire reporting and detailed payroll reports. The service also handles tax registration for employees including Scotland, and the software can facilitate contractor payments in more than 120 countries. Most recently, Gusto began supporting international payments in over 75 countries, in partnership with Remote. Other tools we found useful include customisable offer letter templates, an e-signature tool and an onboarding checklist.

Gusto has four tiers of service, with the Simple plan starting at £31,50 per month, plus £4.75 per employee per month. We liked that Gusto doesn’t include hidden fees for syncing time tracking tools or accounting software. The variety of packages means the software can grow with your business, and you can add on more features as you’re ready.

Paycor: Best for Employee Self-Service

  • Paycor has an easy-to-use self-service portal where employees can confirm their information and check their compensation.
  • Paycor streamlines PAYE preparation and ensures employers meet deadlines.
  • The plans are more expensive than what other payroll providers charge.
Editor's Rating: 9/10
Visit Site

Paycor offers intuitive online payroll software that comes with a comprehensive employee self-service portal. This portal can be used to review compensation data and update personal or financial information. Employees can also use the portal to request paid time off, monitor their payments, review their benefits and access their pay stubs, while the Paycor Time solution offers physical or app-based time clocks.

Paycor has four plans, each with a flat monthly base rate and per-employee fee. Here is an overview of each of the packages.

  • Basic: The Basic plan is £78 per month, plus £3.95 per employee per month. It comes with payroll processing, PAYE submissions, PDF reports, access to the Paycor mobile app, and employee self-service for attachment of earnings orders and child support information.
  • Essential: The Essential plan is £117 per month, plus £5.50 per employee per month. It expands on the Basic plan with PTO requests and manager approvals, new-hire onboarding and tax filing, and compliance checklists and templates.
  • Core: The Core plan is £159 per month, plus £6,32 per employee per month. It comes with everything offered in the first two plans, plus HR and career management services.
  • Complete: The Complete plan is £159 per month, plus £11 per employee per month. It adds advanced analytics and data benchmarking, integrations with pensions providers, and dedicated account manager support.

We liked that Paycor was designed for simplicity, with payroll running automatically (while generating updates through the accompanying mobile app) and proactive alerts sent out if there is missing information. Like Paychex, staff can examine pay stubs up to three days before payment is received, to proactively report mistakes.

Paychex Payroll: Best for Businesses of All Sizes

  • Paychex offers multiple payment methods for employees.
  • The company provides flexible payroll schedule options.
  • Businesses on a tight budget may find Paychex too expensive.
Editor's Rating: 9.3/10
Visit Site

Paychex is a payroll service that’s a great option for businesses of all sizes. The company offers weekly, biweekly, semimonthly and monthly payroll schedules. Paychex can accommodate all types of workers, including full-time and part-time employees. Team members can choose to receive their paycheck as a bank transfer, cheque or prepaid debit card.

You can manage your payroll with the computer software or the Paychex mobile app, which is available for iOS and Android devices. To run payroll in as little as two clicks, you just need to enter the necessary information and submit it for processing. The self-service feature allows employees to log in to the system and view their pay stubs and year-end tax documents, while the optional Pre-Check service enables employees to flag payroll issues before payment is issued. We also liked that Paychex offers more than 250 integrations, from AIG to Xero.

Paychex offers three packages, which start at £31 per month, plus £3.95 per employee per month. The most basic plan includes payroll processing and tax preparation services, while the more advanced plans come with attachment of earnings payment management and onboarding services. In our research, Paychex was unique in having hundreds of compliance experts monitoring regulatory changes across the UK, feeding this back into the software.

Square Payroll: Best for Tax Filing

  • Square is user-friendly and intuitive, requiring minimal training.
  • Square combines payroll data with applicable tax rules to ensure compliance and help you meet filing deadlines.
  • The vendor requires you to set up your own third-party software integrations.
Editor's Rating: 9.5/10
Visit Site

You may know Square as a payment processing platform, but the company also offers an online payroll service. Square Payroll is easy to use and has all the features we looked for in a payroll software company, including a dedicated payroll smartphone app.

You can use Square Payroll to process payroll for PAYE employees and self-employed contractors within IR35 accurately and on time.. The software automatically prepares necessary tax forms based on the information that’s already in your system, reporting them back automatically to HMRC.

Customer service is available via phone, email and live chat. The live chat tool is built directly into the software and allows you to contact payroll specialists, who understand how to optimise payroll processes. Speaking of specialists, Square has copied Intuit in outsourcing the HR and compliance services it offers to external partner Mineral.

Square can integrate with the best time and attendance systems as well as POS software. The system tracks employee hours automatically, and when it comes time to process payroll, you can pay employees using their Square balance rather than their bank account. We are impressed with Square’s new AI tools as well. These include AI-generated content for your emails and business communications.

There is no contract requirement for Square Payroll, which we found ideal for companies looking to avoid long-term contracts or commitments. Pricing plans start at £27.50 per month, plus £4.95 per employee per month. Alternatively, there is a contractors-only option, which allows you to pay third-party contractors within IR35 for £4.95 per payment with no monthly base fee.

Rippling Payroll: Best for Ease of Use

  • The software has an easy-to-use and intuitive interface.
  • Rippling offers over 500 integrations with blue-chip software brands.
  • Pricing isn’t transparent beyond the per-employee rate.
Editor's Rating: 9.4/10
Visit Site

Rippling’s online payroll software has a user-friendly interface and requires little training for new users. The software works with over 500 third-party applications to improve your payroll process, tax preparation and other business operations. The payroll process is so simple that you can run it in as little as 90 seconds.

The software tracks important metrics like total hours worked per employee, paid time off and labour expenses. You can set up bank transfers directly in Rippling or give employees paper checks. The software automatically deducts an employee’s tax and National Insurance based on their tax code, and it automatically files international taxes. Automated workflows support Boolean rule processing, with outcomes such as approval automatically being requested for certain expense values or types.

Rippling advertises a price of £6.35 per person per month but requires bespoke quotes for the base fee. The platform also requires all payroll customers to use its workforce software, Rippling Unity, which houses all data related to payroll, onboarding, benefits administration, and time and attendance. Indeed, we like the fact that all employee data is combined into a unified record, allowing Rippling to automate functions like box dispatch so departing employees can return hardware.

The system automatically compiles the necessary data for PAYE submissions and automatically identifies applicable tax rates in Scotland. You can then file and remit payments directly through Rippling. If your business operates across national borders, Rippling offers international payment support. Bill paying software will be added soon, covering global invoices and expenses, while domestic receipts can already be forwarded and viewed digitally.

Remote Payroll: Best for Onboarding Employees and Contractors

Remote Payroll
Remote Payroll logo
  • Remote offers payroll solutions for a distributed, global workforce.
  • The platform comes with a seamless onboarding process for employees and contractors.
  • Customer support is available only via email or through the company’s Help Centre.
Editor's Rating: 9/10

Remote Payroll is an all-in-one payroll provider for businesses with an international workforce. The company is compliant in more than 60 countries and even offers country-specific benefits packages, with payments made in employees’ local currencies.

There are a variety of plans available depending on whether you want to use the software to manage contractors, a remote workforce or a global payroll. The standard solution comes with an employee self-service portal, HR library, new-hire reporting and analytics. We liked that there are no contracts or minimum employee headcounts, making this ideal for companies who rely heavily on third-party contractors or firms with fluctuating workforce numbers.

You can also use Remote Payroll as an umbrella agency. If you choose this option, the company will manage the local payroll, taxes and benefits for you to ensure your business stays compliant in various countries. The umbrella company service costs £475, but you will need to contact the vendor for a global payroll quote. It costs £23 per contractor per month to manage and pay international contractors, with no exchange fees and one-click approval for recurring invoices.

Deluxe: Best for Integration Capabilities

Deluxe
Deluxe logo
  • Deluxe’s full-service payroll is backed by a dedicated customer service team that can optimise your processes.
  • Deluxe handles all implementation and configuration, ensuring it’s done correctly.
  • There are no free trials to test the software.
Editor's Rating: 9.3/10

With Deluxe’s easy-to-use payroll software, payroll can be completed in just three simple steps. The software allows you to adjust pay for fractions of hours worked, and you can issue paper checks or direct deposit payments. All the core services are offered: full-service PAYE filings and submissions across the UK (including Scotland), P60/P11D/P45 processing, and pension scheme contributions..

Deluxe interfaces with dozens of third-party software providers, including accounting software and point-of-sale (POS) systems. The integration process includes seamless data migration, while the in-house integration between HR, benefits and payroll ensures changes in one automatically are applied to the others.

As a Deluxe customer, you’ll have access to a dedicated customer service team that can offer tax advice and general guidance. These reps can ensure you’re tax-compliant and help you find ways to save time and money on your reporting and filing processes. Even with this consultative approach, the vendor has simple pricing plans: £35 per month, plus £5.50 per employee per month, for its Payroll + HR Essentials package and £35 per month, plus £10.10 per employee per month, for its Payroll & HR Enhanced package with custom reporting fields and unlimited workflow automation.

Deluxe’s Microsoft partnership means its services can be accessed via Microsoft Dynamics 365 Business Central. This all-in-one solution is meant to simplify your business software needs via a single platform. Deluxe now offers integrations with several popular accounting software services, including QuickBooks, Xero and Sage. The ability to sync payroll and accounting software is another advantage for business owners seeking to streamline their operations.

Zenefits: Zenefits

Zenefits
Zenefits logo
  • Zenefits offers HR and payroll services for £11 per employee per month, which makes it one of the most cost-effective platforms we reviewed.
  • A user-friendly interface has logical layouts and is equally straightforward to use on desktops and mobile devices.
  • Support is available for only part of each weekday and not at all during weekends.
Editor's Rating: 9.4/10

Zenefits Payroll is a smartly presented software platform that can run payroll in just three mouse clicks. It offers all the core functionality we look for in our review of payroll services at a highly competitive cost. There’s extensive report functionality, including pre-prepared reports, while niche features include reported tips and assistance with child support remittance. Part-month payments are automatically prorated, dynamic pay stubs can be personalised with messages, and workers are able to view documents even after they’ve left the company to work elsewhere.

There’s something inherently likeable about Zenefits, from the simplicity of its colourful user interface to the firm’s straightforward pricing structure and available upgrades. It doesn’t try to blind its users with science, focusing instead on logical processes and practical support. We especially appreciated the presence of a 25-course learning path, showing new clients under the hood and offering support with specific challenges like pension scheme transfers.

In terms of pricing, Zenefits offers modular packages that can be built on one of three base plans, which range from £6.33 to £16.62 per month, plus £4.75 per employee per month. Additional costs range from advisory services (£6.33 per month) to recruiting and applicant tracking software (£255 per month).

isolved: Best for Firms Needing Full HR Tools

isolved
isolved logo
  • Despite its cartoonish interface, isolved is a well designed suite of payroll, HR and workforce management software.
  • Employees are encouraged to be self-reliant, reducing pressure on managers.
  • The company failed to respond to a variety of requests for support and assistance.
Editor's Rating: 8.1/10

Over the last four decades, isolved has grown into a suite of HR and workforce management tools, of which payroll is an integral component. Its unusual approach to payroll is reflected in the creation of a full learning experience platform called People Heroes University, which covers a wide variety of training and self-tuition.

While some rivals encourage you to upgrade to premium software subscriptions to receive employee self-service, this functionality is baked into isolved. Staff can view everything from paid time off balances and personal data pension schemes and P60 forms with updates automatically sent to pension providers and insurance companies.. Meanwhile, managers and admins view consolidated payroll benefits and HR data for each employee through a straightforward user interface.

Other simplification tools include automatic tax calculations, filing and agency payments, tax credit eligibility, and the usual threshold-monitoring rules and alerts.

Payroll Software Costs

Online payroll providers typically have a monthly or per-payroll cost structure. With monthly plans, you pay a base fee and a per-employee fee. Base fees typically range between £23 and £115 per month, and per-employee fees often range from £3.95 to £7.90 per month. Some firms are open and honest about their costs, while others prefer to generate a bespokequote in response to a new business inquiry. This means handing your contact details over to a sales rep, who is free to give you the hard sell on that company’s products and services.

With a monthly fee structure, you can usually run payroll as often as you like for one flat fee. This is often a more economical choice for a business that runs payroll several times per month. With a per-payroll fee structure, companies may charge you anywhere from £8 to £80 per payroll run, plus per-employee fees of £1.60 to £11.80 per month. A per-payroll model might work better for a business that runs payroll more infrequently. In addition, some providers charge extra for year-end tax services and initial setup.

A few online payroll services offer a free trial, giving you the chance to try out the software for at least one payroll run to see if it meets your needs. Even if you can’t get a free trial, several vendors will let you cancel your contract at any time.

Key TakeawayKey takeaway

Most online payroll services charge a monthly base fee of £23 to £115 per month, plus a per-employee fee of £3.95 to £7.90 per month.

Payroll Software Features

Payroll services offer a variety of features and tools that streamline payroll processing for small businesses. Here are some of the most valuable features to look for when considering payroll companies.

  • Unlimited payroll processing: Some payroll services allow you to run payroll as many times as you want each month. This gives you the freedom to determine the pay periods that make the most sense for your employees. This flexibility also lets you pay third-party contractors whose engagment is within the scope of IR35 whenever they complete a project, without paying extra for additional payroll runs.
  • Payment options: Most online payroll services allow you to pay employees by bank transferpaper checks or prepaid debit cards (also known as pay cards).
  • PAYE: Online payroll services determine how much your business owes in employee and employer PAYE. They’ll also complete and file the paperwork with the appropriate federal, state and local tax agencies, and make the required payments on your behalf.
  • Year-end tax forms: Payroll services prepare all of the necessary year-end tax forms for your workforce and provide them to your employees and independent contractors.
  • PTO management: Some payroll services handle some or all of your PTO management. This can include tracking how much PTO employees earn and use, as well as allowing employees to request time off and managers to approve or deny those requests.
  • Employee self-service: Payroll software typically has an online portal that employees can access to view their pay stubs and year-end tax forms.
  • New-hire reporting: Many payroll services can complete and file the required paperwork each time you hire a new employee, registering them with HMRC. These documents need to be filed in the state where your business operates.
  • Mobile access: Most payroll services provide a dedicated mobile app or a mobile-friendly website, ensuring the platform is accessible from smartphones and tablets.
  • HR services: In recent years, many payroll system providers have started offering additional HR services, like onboarding tools, employee benefits management and HR compliance. Additionally, some payroll companies give your business access to dedicated HR professionals who can help you navigate HR issues.
  • International coverage: Some payroll software platforms will support payments to overseas freelancers and contractors, while companies like Remote and Papaya have been built from the ground up to facilitate payments to foreign workers, freelancers and clients.
Key TakeawayKey takeaway

Most payroll software comes with unlimited payroll processing, the ability to pay employees in multiple ways, assistance with year-end tax forms, PTO management, employee self-service and mobile access. It is increasingly common to be able to use a payroll service for other HR needs too.

Choosing Payroll Software

There are three key stages involved in choosing the right payroll service for your small business. We outline these below.

1. Determine Your Business’s Needs

When choosing an online payroll service for your small business, there are several factors to consider. For most companies, budget will be a significant factor when choosing which provider to go with. What can your organisation afford to spend on payroll processing and assorted services? What features can you live without, and which are absolute necessities? Many payroll platforms are bundled into larger suites of HR and human capital management (HCM) software, indivisible from these wider offerings and therefore unsuitable for businesses that want a payroll package only.

You will also need to determine how often you process payroll. Is it every week, biweekly or just once a month? Some payroll providers offer unlimited payroll runs, while others charge per run, so this is an important factor to consider.

Evaluate your firm’s competing priorities. Is same-day or next-day deposit important to you? Is it more vital than other functions? Does your business need a platform that includes additional HR services? Make a list of everything you want your payroll software to help you accomplish so you can look for providers that meet your company’s needs.

2. Research Potential Solutions

Once you know the specific features you’re looking for in a payroll software provider, you can compile a list of potential solutions. From there, you can review the features each vendor offers and get a sense of the suitability of individual platforms. Compare each system against your list of desired functions, and remove from consideration the platforms that don’t align.

Once you’ve narrowed your list down to just a couple of options, it can help to schedule demos with these providers. During a demo, you can see how the software works and ask the sales team pertinent questions. For instance, can you run payroll as often as you want each month? Does the package come with a mobile app and an employee self-service portal? You should also evaluate how intuitive and easy it is to use the program. The platform’s interface should be simple to understand and allow you to run payroll in a matter of minutes. Remember that sales reps will talk up positives and gloss over negatives, so be probing in your questions and don’t let them distract you from getting the answers you need.

Make sure you fully comprehend how the provider’s pricing works and what you can expect to spend each month. For instance, many payroll providers charge a base fee along with an additional per-employee fee. What structure do they use, and are any setup charges or fees levied for additional payroll runs? Do you pay for the software when it’s installed, a month after subscribing or when you perform your first payroll run?

Finally, you should look into what kind of customer service the company provides. How is the payroll provider rated by customers in online reviews and how do they respond to customer complaints? Is there phone, email and chat support, or are you limited to just one of those options? The answers to these questions should further narrow down your prospects, as will the hours in which support is available.

3. Make Your Selection

After you’ve weighed the pros and cons of each provider, you can identify your top options and begin the sign-up process with your preferred vendor. If possible, take advantage of demos or free trials so you can get some hands-on experience. Many providers also provide introductory offers and discounts. See if you can negotiate the advertised price, and always ask if any discounts are available; recently withdrawn offers or incentives may still be available on request. Once you’ve chosen the software that’s best for your business, you can move forward with the setup phase.

Advantages of Payroll Software

Here are some of the biggest advantages of using a payroll service:

  • Increased efficiency: Using a comprehensive payroll service means you don’t have to hire someone in-house to handle all of your business’s payroll needs.
  • Ease of use: The software does most of the heavy lifting for you. It calculates pay amounts, withholds the right amount of tax and both forms of National Insurance, and notifies you when HMRC needs to be paid and how much you need to pay them.
  • Ensured tax compliance: Payroll companies also take care of onboarding staff, submitting PAYE notifications and more on your behalf, ensuring you meet your legal obligations.
  • Reduced expenses: The best payroll services can save your company money by streamlining submissions related to individual pay runs and end-of-year submissions for each employee and the company as a whole.
  • Reliable processing: Payroll services are the most reliable way you can run payroll each week. If you set up automatic payroll, it will run without any input from you. But even if you choose to operate it manually, the system can still send you reminders each week. This ensures employees are paid accurately and on time.
  • Wide accessibility: If your payroll service offers a self-service app, employees can easily access any details they need. Logging in to the app should reveal their payslips, P60s and BACS payments. Some platforms let employees check their payslips before payroll is run, providing a useful window to correct errors preemptively.
  • Manage remote workforces: Payroll services provide you with the tools to stay in compliance with laws and regulations in almost any jurisdiction. Some providers also offer umbrella agency services for third-party contractors working within IR35 rules and overseas workers.
Did You Know?Did you know

In addition to determining whether you should pay employees hourly or on a salary basis, you need to figure out whether they are classified as exempt or nonexempt.

Frequently Asked Questions

Here are answers to some of the most common questions about payroll software and services.

Online payroll software, also known as online payroll services, is cloud-based software you can use to process payroll and onboard new employees. Most online payroll software is easy to use and allows you to run payroll in minutes.

In addition to managing your business’s payroll, comprehensive payroll companies also handle your firm’s PAYE contributions, manage employees’ paid time off and provide new-hire registration with HMRC. They may also offer HR management, benefits administration, time and attendance services, and workplace pension management. [Learn about taxable fringe benefits and how they relate to wages.]

Payroll services are important for small businesses because most small companies don’t have a dedicated HR team that knows the ins and outs of running payroll. Instead, they can rely on payroll companies to manage these tasks for them. These services ensure employees are paid correctly each month and that PAYE contributions are paid. By outsourcing these tasks, business owners can save money and time

To set up payroll software, you’ll start by connecting your business’s bank account to your payroll platform of choice, entering your employees’ pay rates and tax codes. Employees who want to be paid by BACS transfer can enter their current account information in the system’s online portal. Once this information has been submitted, you can set your pay schedule and start processing payroll based on each team member’s pay rate and hours worked.

Yes. Most payroll service providers offer mobile apps for iOS and Android devices. These apps typically allow administrators to run payroll, review past payroll runs and pay PAYE submissions. Additionally, employees may be able to use the mobile apps to review their payslips, pay history and PTO accruals. Pay attention to whether the mobile apps offered by specific providers are specifically aimed at employees or designed to help managers and administrators.

How long it takes to process payroll varies by provider, but many payroll services complete the process within two days. This means payroll administrators need to submit their final payroll numbers two days before payday. If you need same-day direct deposits, Intuit QuickBooks Payroll is able to provide this service.

There are a handful of free payroll software solutions, which may be useful for businesses that are just getting started. Free payroll software can help you manage PAYE, attachment of earnings orders and benefits deductions. However, when using a free service, you may have to sacrifice other valuable features, like dedicated customer support.

Tip: You can hire an accountant if you need help managing the collection and reporting aspects of payroll processing. Accountants can analyze your payroll and provide valuable guidance for your business.

Unpaid PAYE penalties apply when an employer fails to pay HMRCthe right amount of employee and employer wage-related tax funds it owes. Failure to complete and submit the Full Payment Submission (FPS) documents could lead to penalties. These penalties include fines, interest on overdue amounts and, in the most extreme cases, liens on property. The percentage of fines that HMRC can impose depend on how late the payment is. To avoid fines and even criminal charges, ensure your employee and employer PAYE are paid on time to the correct amount and that your company has filed all the required paperwork.

An example of PAYE tax is the the Employer’s National Insurance contributions. This is a mandatory payroll deduction that employers must submit to HMRC to cover the State Pension, pay for the NHS and fund other social security benefits for employees.

A pay period is the recurring length of time during which an employee’s wages are calculated for payment. Pay periods can be weekly, biweekly, semimonthly or monthly. To choose the best pay schedule for your business, weigh the pros and cons of each option.

An umbrella agency helps you hire workers, particularly contractors and freelancers, in foreign countries by acting as the legal employer for overseas employees. They also manage payments for UK contractors and freelancers operating within IR35 rules for an employer or client. This solution ensures that you aren’t responsible for various payroll and compliance issues here and overseas. However, it tends to be far more expensive than standard payroll services.

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Jamie Johnson, Business Operations Insider and Senior Analyst
For more than five years, Jamie Johnson has been guiding business owners on financial matters both big and small. This includes investment advice, insights on business loans and funding options, recommendations on insurance and more. Johnson excels at delivering easy-to-understand direction so entrepreneurs can make the best financial decisions for their businesses and, as a solopreneur herself, she regularly tests business strategies and services. Johnson's expertise can be found in a variety of finance publications, including InvestorPlace, Credit Karma, Insurify and Rocket Mortgage. She has also demonstrated a deep understanding of other B2B topics — including sales, payroll, marketing and social media — for the likes of the U.S. Chamber of Commerce, U.S. News & World Report, CNN, USA Today and Business Insider.
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