Price is a reasonable thing to care about when you’re running a small business. But with payroll software, cheap can mean very different things. Some of the least expensive options are capable tools that handle everything a small employer needs. Others cut corners in ways you won’t notice until you’re chasing a compliance issue the night before payday. We review the budget end of the UK payroll software market.
How much does payroll software cost?
Most paid payroll software for UK small businesses uses one of three pricing models.
Per-employee monthly pricing — a base fee plus a charge per employee. Common with cloud products like Sage and QuickBooks. Easy to budget at small team sizes, but the cost climbs as you hire.
Flat monthly pricing — a single monthly fee up to an employee cap. Less common, but simpler to forecast.
Annual licence pricing — you pay once for the tax year. BrightPay and Moneysoft work this way. Often the cheapest option overall for businesses with more than a handful of employees, because there’s no per-head charge.
To give you a rough idea of cost, for a five-employee business:
| Price range | What to expect |
|---|---|
| Free | HMRC Basic PAYE Tools; limited commercial free tiers |
| £7–£15/month | Entry-level paid options; basic features, limited support |
| £15–£35/month | Mid-tier cloud tools with auto-enrolment, integrations |
| £99–£200/year | Annual licence tools — often better value for 10–50 employees |
If you have fewer than three employees and want to spend nothing at all, it’s worth reading our separate guide to free payroll software for UK small businesses before committing to a paid plan.
The cheapest paid options
Sage Payroll Essentials
Standard rate is around £20/month for up to ten employees, but Sage runs heavy introductory discounts for new customers — sometimes 90% off for three months — which brings the effective starting cost down to a few pounds a month.
At the Essentials level: RTI submissions, PAYE and NI calculations, auto-enrolment, payslips, and automatic updates when legislation changes. The interface is clean and well-documented, which matters if you’re not a payroll professional.
The thing to watch: the per-employee pricing means costs rise with headcount. At ten employees on the standard rate you’re paying around £20 a month; more at twenty. If you’re growing quickly, the annual licence alternatives start looking more attractive well before you hit double digits.
QuickBooks Payroll
Similar story to Sage. Introductory plans from around £7/month, higher standard rates thereafter. The integration with QuickBooks accounting is seamless if you use both — payroll journals post directly, which saves reconciliation time at month end.
For businesses not already on QuickBooks, the case is weaker. You’re buying into an ecosystem. If you don’t need the accounting piece, there are cheaper standalone options that do payroll just as well.
Moneysoft Payroll Manager
This is where the pricing conversation gets interesting. A single employer licence for the tax year costs around £72 — about £6 a month — covering unlimited employees. No per-head charges. No monthly fee that scales as you hire.
Moneysoft is a desktop application (Windows only), which feels dated, but that’s partly why it costs what it costs. No cloud infrastructure, no per-seat licensing. Tens of thousands of UK businesses run their payroll on it, including small accountancy practices running payroll for multiple clients.
The feature set is comprehensive: RTI, all statutory payments, CIS, auto-enrolment with NEST integration, payslips, full year-end reporting. The interface is functional rather than pleasant — think tools over aesthetics. And because it’s desktop-only, you need to be at a specific computer to run payroll. No cloud access, no mobile app.
For a small business that processes payroll once a month from one office machine and wants to keep costs minimal without cutting compliance corners, Moneysoft is hard to fault on value.
BrightPay
Often mentioned alongside Moneysoft for good reason. Annual pricing, unlimited employees, and the payroll features are notably strong — particularly auto-enrolment, which BrightPay handles cleaner than most tools at any price: employee assessment, postponement, contribution calculations, pension provider uploads, all in one flow.
The optional cloud add-on (BrightPay Connect) gives employees a self-service portal for payslips and adds online backup. It’s charged separately, which keeps the base licence price down for businesses that don’t need it.
Worth knowing: BrightPay’s desktop (Windows) version is being discontinued after the 2025/26 tax year, with the product moving fully to a cloud model. If you’re considering BrightPay now, check the current pricing for the cloud version before committing to the annual licence.
FreeAgent
FreeAgent is mainly an accounting tool for freelancers and small businesses, but its payroll module is included in all plans. The more immediately relevant point: NatWest and RBS business account holders get FreeAgent free as part of their banking benefits.
That makes it the cheapest option for qualifying businesses by some distance. For everyone else, FreeAgent’s subscription starts around £19/month including payroll.
The payroll side covers RTI, PAYE, NI, auto-enrolment, and payslips. It works well for small teams — probably up to around fifteen employees before it starts to feel limited — and the fact that invoices, expenses, VAT, and payroll all sit in one place is genuinely useful for businesses where the owner handles everything.
What tends to get cut at the budget end
A few things that routinely disappear from cheaper tiers:
Support. Entry-level plans often mean email only, slower responses, or community forums. If something goes wrong on payday, that’s a different experience to having a phone number.
HR features. Leave management, absence tracking, employee records — not usually included at low price points.
Multiple PAYE schemes. If you run more than one company or have a complex structure, free and entry-level tiers typically won’t handle it.
Advanced reporting. Detailed labour cost breakdowns and custom reports are usually higher-tier features.
Before you choose on price alone
A couple of things worth checking that often get missed:
What does the price actually cover? A quoted rate of £7/month for two staff might become £25/month for ten if it’s per-employee pricing. Know the model.
What’s the year-two rate? Introductory pricing from Sage and QuickBooks is often generous. The standard rate is what you’ll pay once the offer period ends.
Is support included? A £7/month plan with email-only support isn’t equivalent to a £15/month plan with phone support, particularly in the early months when you’ll have questions.
For businesses with straightforward payroll needs, the annual licence tools — Moneysoft or BrightPay — tend to come out cheapest overall once you take the per-employee cost out of the equation. For businesses that want cloud access and don’t mind paying monthly, Sage and QuickBooks are solid.
For the full breakdown — features, who each tool suits, and how they compare head-to-head — see our guide to the best payroll software for UK small businesses.
