HRFive online payroll providers for your small business

Five online payroll providers for your small business

Once your small business has employees it will need to pay the staff on a regular basis – running an accurate and efficient payroll process each month is incredibly important because if this goes wrong for any reason, it’s directly impacting the pay received by your staff.

To help your small business there are specialist companies that will manage payroll for you. These payroll providers manage everything from sending the payment to providing payslips, annual reports and even pension and bonus contributions. In this article, I cover the key points you should look for when comparing payroll providers, a quick overview of some of the best-known online payroll providers for small businesses, how to choose the right online payroll provider for your specific needs, pricing options and plans offered by online payroll providers, setting up and implementing an online payroll system for your small business, common challenges and pitfalls to avoid when choosing an online payroll provider.

Choosing the right online payroll provider

Choosing the right online payroll provider is crucial for the success of your small business. A reliable and efficient payroll system ensures that your employees are paid accurately and on time. A good payroll provider will help you stay compliant with tax laws and regulations, saving you time and potential penalties. Furthermore, an online payroll system streamlines the entire payroll process, reducing the administrative burden on your business and allowing you to focus on growing your business.

A payroll provider will normally work with your HR team, or the finance director, to manage all aspects of your company’s payroll. This included managing the required forms such as payslip, P60, P45 and P11D forms. It will also manage the payments – either by carrying out the payments on behalf of the business or, more commonly, sending a file to the finance team to run payment transfers to employees.

If your business uses HR software to manage the other aspects of hiring, holidays, appraising and managing employees and personal employee data, then a payroll service can normally either integrate in to your HR software system or take a regular export of employee details to manage the payroll and any changes in pay.

Which features do you need?

When selecting an online payroll service, there are several key features you should consider. Look for a service that integrates with other software you use, such as HR, accounting or time-tracking software. This integration will ensure that all your systems work together seamlessly, further streamlining your payroll process and avoiding you having to manually upload files. Check which type of add-ons are available to support your staff, for example will the provider manager pension contributions and statements, help calculate bonus payments, provide a central hub for your employee documents such as P60 and payslips? And third on our list is to make sure the provider offers the right level of customer support to provide access to knowledgeable and responsive support staff when you and your employees have questions or encounter issues with your payroll system.

Benefits of using a payroll provider

Using online a payroll service provider saves you time and reduces the administrative burden associated with manual payroll processing. With an online payroll system, you can automate calculations, deductions, and tax filings, freeing up your time to focus on other important aspects of your business. A service provider should improve the accuracy and reduce the risk of errors. Automated calculations and built-in compliance features ensure that your employees are paid accurately, and tax filings are done correctly. And an online payroll systems provide enhanced security for your sensitive payroll data. Reputable providers use encryption technology and robust security protocols to protect your data from unauthorized access.

Top 5 best online payroll service providers for small businesses

Let’s check out the best online payroll software for a small business in the UK.

  1. PayEscape
  2. ADP
  3. IRIS Software
  4. Moorepay
  5. QuickBooks Payroll

1.  PayEscape

PayEscape is an easy-to-use cloud-based payroll service solution for UK-based businesses. This company started its services in 2006 with the vision of providing solutions to process payroll. In addition to offering cloud-based payroll, PayEscape also features time and attendance tracking, assignment reminders, in-depth reporting, and payroll taxes calculations.

Using this payroll software, you can easily manage and operate employees’ working hours, holidays, and total wages. Also, there is no need to worry about errors in the calculations as PayEscape offers accurate, precise time management solutions. This time management feature ensures correct working history and payroll processing.

One of the best-selling features of PayEscape is that it offers adjustable monthly contracts. For many reasons, the lack of long-term contracts greatly benefits small businesses.

First, short-term agreements allow you to reevaluate the services before renewing the contracts. Secondly, these contracts restrict you from making more extensive financial commitments.

Indeed, PayEscape is a good payroll solution for any small business owner looking for an easy-to-operate payroll solution.


  • The best cloud-based HR and payroll solutions
  • Transparent pricing
  • Availability of monthly short-term contracts
  • Allows employers to track employees’ work history
  • Offers accurate automated payroll processing and deduction of payroll taxes
  • Excellent customer service


  • Some people may find the user interface difficult to use

2.  ADP

ADP is one of the best-known payroll companies in the UK and helps you carry out payroll administration even if your business has only a few employees – it has over half a million small business customers running their payroll through its platform.

ADP’s small-business payroll solutions also provide a flexible and customizable pricing model. This system accurately records employees’ monthly work hours and presents detailed reports.

ADP also offers excellent services at every phase of your business growth. Whether you have just started or expanded your business, ADP offers flexible payroll services for both straightforward and complex payroll systems.


  • Accurate and easy-to-operate payroll services
  • Provision of quarterly and annual reports
  • Access to payroll experts all the time
  • Separate mobile app for both employee and employer
  • Integration with a long list of third-party tools and services
  • Easily manage complex and changing payroll plans


  • Pricing information is not easy to find

3.  IRIS Software

IRIS started its business in 1978 and is on of the UK’s best-know providers of financial software systems. It offers software systems for accountancy firms (so your accountants might already be using the IRIS platform) and also provides payroll services for small businesses to process their accounting and HR needs.

Features of the payroll service include online filing, payment and tax calculations, holiday diary, and payroll management tools. There’s unlimited online support to help with any aspects of setting up or using the system.


  • HMRC-recognized payroll service
  • Offers real-time reporting to HMRC
  • Efficient payroll services for the complex payroll needs of thousands of employees
  • In compliance with Automatic Enrolment and RTI (Right to Information) legislation
  • Automatic monthly P32 updates
  • Allows employers to track and read employees’ data through comprehensive reports


  • Lack of built-in employee database and timesheet

4. Moorepay

Moorepay is a UK-based payroll service provider that’s been in the business since 1996 and offers HR and payroll services to multiple industries; it’s a recognised by HMRC and the Pension Regulator for providing services.

The system portal is user-friendly and can be customized and there are options to allow you to connect to your business systems to provide accurate data transfer. As well as the software and operational side, Moorepay provides payroll experts for you and your team to help setup and answer questions on best-practice.


  • User-friendly interface
  • Access to payroll specialists
  • Easy to understand onboarding process
  • 99.9% payroll accuracy
  • Personalised payroll set up handled by a payroll specialist


  • Not recommended for small businesses with less than ten employees

5.  QuickBooks Payroll

QuickBooks Payroll is one of the UK’s top-rated accounting software products, perfect for a sole trader, a limited company, or an accountant. This software is the best payroll service provider regardless of your business size. QuickBooks payroll’s most notable features include HMRC submissions, automatic payslips, ease of filing CIS (Construction Industry Scheme) taxes to HMRC, and the provision of Smart Pensions.

QuickBooks Payroll offers an easy and efficient system for statutory payments. These payments include paternity, maternity, statutory sick pay, and parental bereavement leaves. Thus, you won’t have to calculate the leaves; these pay manually in a separate sheet.

QuickBooks Payroll offers various payroll service packages at reasonable pricing. In particular, these packages are best suited for small businesses that do not need extra features. Additionally, if you pick the premium package offered by QuickBooks Payroll, you will get monetary protection. This tax penalty protection is a unique service not offered by many payroll services.

Overall, QuickBooks Payroll is an excellent payroll service for small businesses looking for efficient payroll management at an affordable rate.


  • Best payroll software for people who have zero prior knowledge of payroll
  • Allows employers to pay salaried employees accurately per their log-in time
  • Offers monetary protection against tax and penalties
  • Automatic tax filing and expert HR support
  • Provides health insurance broker integration
  • Transparent and affordable pricing


  • Limited integration with third-party tools and services

How to choose the right provider

Choosing the right online payroll provider for your specific needs first start by assessing your business requirements and determine the features that are essential for your payroll process; for example, the number of employees, complexity of payroll calculations, integration needs, and compliance requirements. Compare different providers based on their reputation, pricing, integrations, and customer support. Narrow down your options based on your specific needs and preferences.

Online payroll providers offer various pricing options and plans to cater to the needs of different businesses. The pricing structure typically includes a base fee plus an additional cost per employee or per payroll run. Some providers offer multiple plans with different features and levels of support. It is important to carefully assess your business requirements and budget to determine the most suitable pricing option.

Setting up with a payroll provider

Setting up and implementing with a new provider will take some time as you need to gather all the necessary information and data required for payroll processing, such as employee details, tax withholding information, and payment preferences. As well as the basic data, you might be looking to integrate your HR or accounting software in with the provider, so you’ll need to test the integration and make sure that data is flowing correctly. Lastly, you’ll need to organise the payment and banking details to ensure that payments are processed correctly and your staff are paid on time.

Frequently Asked Questions About Payroll Service Providers

1.   What is the difference between outsourcing payroll services and payroll software?

As the name indicates, payroll software is software that provides you with an automatic platform along with payroll tools and services. In general, multiple payroll software differs concerning user interface and HR and payroll processing services.

On the other hand, you can hire payroll service providers to fully or partially manage your payroll system. Indeed, this decision depends on how much payroll you wish to handle.

2.   What is the average cost of payroll software for a small business in the UK?

There is a varying pricing structure for payroll software and outsourcing payroll services. On average, a fully managed payroll costs about £30 a month if your small business has five employees. And a partially managed payroll will cost about £20 a month.

3.   What are the advantages of outsourcing payroll services for small businesses?

Firstly, outsourcing payroll UK services saves you time and money. It is affordable as compared to hiring professional staff.

These services include reporting employee payments, taxes, pensions, RTI, health insurance, employee benefits, reporting RTI, and other payroll services.

Additionally, payroll software will automatically and accurately file your documents to HMRC. Overall, payroll services offer you error-free and time-efficient HR tools.

In Summary

Payroll services offer a budget-friendly option to manage your payroll services accurately. Also, you can put your mind and effort into other parts of your business. There are many free payroll software UK providers. But all these five online payroll providers for small businesses are well-renowned and reliable. Hence, you can employ any online payroll service today per your business needs.

Written by

Mark Hodgson
Mark Hodgson
Mark Hodgson is one of our expert writers. Mark is our lead researcher and editor who writes our main guides and expert topic coverage. He’s passionate about helping entrepreneurs, startups and small businesses with practical advice delivered clearly. Mark’s worked for a number of business magazines and titles and has started two small businesses himself, so has first-hand experience in setting up, managing and growing a small business and shares his expertise with our readers.

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