The Best Free Payroll Software Solutions (HMRC Approved)

1st Money Free+ is the best free payroll software for small businesses, as it delivers all core payroll features — including PAYE and National Insurance calculations, payslip generation, and RTI submissions — while supporting a wide range of worker types.

This makes it one of the most practical free options for UK employers running payroll in-house, despite having a user cap of nine employees.

For larger or fast-growing teams, Employment Hero’s Free payroll plan stands out. Our research found it to be the only reliable free payroll provider with no employee limit, making it a strong option for businesses that want to run compliant payroll at no cost, without being forced to upgrade purely due to headcount.

All UK businesses must submit payroll reports to HMRC and using HMRC-recognised payroll software is the most reliable way for small businesses to stay compliant. It helps reduce the risk of errors and late submissions, which can result in HMRC penalties ranging from £100 to £400 per month.

Read on to see how the best free payroll software for small businesses compares and to understand when it may be time to upgrade to paid payroll software or switch to a specialist payroll service as your business grows.

The Best Free Payroll Software: Summary

Find out more about our Expert author

1. 1st Money Free+: Best All-Round Free Payroll Software

1st Money Free+ is a cloud-based payroll software plan that businesses with fewer than nine employees can use to manage their payroll. The free tier is HMRC-recognised and allows small employers to run compliant payroll, generate payslips and submit RTI reports at no cost, with paid upgrades available as requirements become more complex.

What are 1st Money Free+’s key features?

1st Money’s Free+ plan bundles a core set of payroll and HR capabilities into a free, HMRC-recognised platform built for UK employers. Features include:

• HMRC recognition with RTI submissions built in
• PAYE, National Insurance and statutory payment calculations
• Payslip generation, plus P45s and P60s
• Support for multiple worker types, including directors and zero-hour employees
• Basic HR functionality, such as employee records and document storage
• A clear upgrade path to paid plans as your payroll needs expand

What features does 1st Money Free+ lack?

Like most free payroll software, 1st Money Free+ comes with some limitations.

The free tier is best suited to very small teams (typically up to around nine employees), meaning growing businesses will eventually need to upgrade to a paid plan. While the platform supports core payroll compliance, advanced automation — such as fully hands-off pension workflows or complex payroll rules — is more limited at the free level.

Third-party integrations are also fairly restricted compared with premium payroll systems. For example, the plan lacks integration options with major accounting providers Xero and QuickBooks, which may be a drawback for businesses that want payroll and accounting data to sync automatically.

2. Employment Hero Free: Best for Budget-Conscious Businesses With Larger Teams

Employment Hero Free payroll is a genuinely free, cloud-based payroll plan for UK businesses that want to run compliant payroll.

Unlike many other free tools that cap users or restrict basic features, this plan supports an unlimited number of employees, allowing small and growing teams to process pays, generate payslips and file to HMRC at no cost.

What are Employment Hero Free’s key features?

Employment Hero Free includes a solid set of core capabilities that make it a fully-functioning, no-cost payroll solution for UK businesses, from compliant HMRC reporting to employee payslips. Features include:

• HMRC-recognised with RTI submissions built in
• PAYE, National Insurance and statutory payment calculations
• Payslip generation and employee self-service access
• Unlimited employees on the free plan
• Clear upgrade path to paid payroll and HR plans as your business grows

What features does Employment Hero Free Payroll lack?

Employment Hero Free Payroll doesn’t include fully automated pension auto-enrolment and ongoing pension filing workflows, which are typically part of the premium tiers or require additional setup.

The free tier also lacks broader HR functionality, such as performance management, recruitment and benefits administration, and complex pay rules, multi-frequency payroll settings, and deeper workforce analytics are reserved for paid plans.

Support and customisation are also more limited on the free plan. While Employment Hero Free covers the essentials, access to priority customer support, guided onboarding and advanced configuration options is typically reserved for paid tiers.

3. Primo Payroll Essentials Free Plus: Best for Auto-Enrolment

Primo Payroll’s Essentials Free Plus plan’s highlight is its auto-enrolment capability. It automatically calculates pension contributions and eligibility, but unlike the other free solutions on this list, Primo’s free system can also communicate this directly with your pension provider.

What are Primo Payroll Essentials Free Plus’ key features?

Primo’s free software comes with the basic features you’d expect, such as tax calculation and payslip generation. Unlike competitor Shape, Primo lets you email a payslip to employees on its free plan. With Shape, you have to upgrade to a paid plan to do this.

Like Employment Hero, Primo also makes it easy to upgrade, with its Essentials 25 plan costing £24.99 per year. However, all Primo Essentials plans have a 10-employee limit, so you’ll get better value for money with Employment Hero’s free plan, if you’re able to make do without advanced payroll features.

Here are Primo Payroll Essentials Free Plus’ key features:

• Integrates with HMRC
• RTI and automatic enrolment-compliant
• Calculates tax and NICs
• Email payslips to employees
• Can be scaled up as your business grows

What features does Primo Payroll Essentials Free Plus lack?

Primo Payroll Essentials Free Plus does have some drawbacks. There’s a 10-employee limit that includes leavers. This means that if anyone leaves your company, you won’t be able to add their replacement to the payroll system if you’re already at the 10-person limit.

Support-wise, you’ll be limited to emails, which will be classified as low priority, so don’t expect swift replies.

4. EnrolPay Self Service: Best No-Frills Option For Small Employers

EnrolPay Self Service can be used to process payroll for up to nine users and has the advantage of being accessible on both desktop and its Android and iOS apps. It’s one of the most basic software solutions on this list, but this also makes it very simple to use.

What are EnrolPay Self Service’s key features?

Given its name, it’s pretty evident that EnrolPay’s free Self Service payroll software is a low-touch solution. You’ll be able to generate printable employee payslips, P45s and P60s, and create employer records (SSP, SMP, SAP, etc.).

You can also scale up for the low cost of £6 per month for one to four employees, which gives you access to features such as automatic RTI submissions and more customer support.

Here are its key features:

• Integrates with HMRC
• Manual RTI submission
• Calculates PAYE, statutory pay and NICs
• Printable payslips, P45s and P60s
• Can be scaled up as your business grows

What features does EnrolPay Self Service lack?

EnrolPay’s free payroll software won’t automatically submit RTIs to HMRC; you’ll have to do this manually from the platform each month. There’s also a nine-employee limit, one person short of almost every other supplier on this list.

You also won’t get auto-enrolment on EnrolPay’s free version — it’s actually an add-on for all of EnrolPay’s “Self Service” payroll systems. Lastly, customer support is extremely limited, and you’ll only get access to EnrolPay’s FAQ library if you need help.

5. HMRC Basic PAYE Tools: Best for Businesses Checking Employees’ NI Numbers

HMRC actually provides its own free payroll software to businesses, called Basic PAYE Tools.

Since it is government-owned, this software allows you to check a new employee’s NI number, send an Employment Payment Summary and send an Earlier Year Update directly to HMRC from the platform. This is useful because it lets very small employers deal directly with HMRC, without relying on third-party software or integrations.

What are HMRC Basic PAYE Tools’ key features?

Like Primo Payroll Essentials Free Plus, HMRC Basic PAYE Tools is limited to businesses with fewer than 10 employees, and can only complete basic payroll functions such as calculating PAYE and NI contributions.

It also has an Apprenticeship Levy calculator, although since this is a tax only paid by large companies with a pay bill of over £3m, it’s essentially a useless feature for software that only manages payroll for businesses of 10 employees or less.

Here are its key features:

• Employee NI number lookup
• Calculates PAYE and NICs
• Apprenticeship Levy calculator 
• Sends data directly to HMRC

What features does HMRC Basic PAYE Tools lack?

HMRC Basic PAYE Tools does not allow for auto-enrolment and it can’t calculate pension contributions.

The system also cannot produce payslips for employees. Although you can calculate pay and tax values within the tool, it doesn’t generate formatted payslips for distribution, meaning employers must create and issue payslips separately or with other software.

Most importantly, it can’t be scaled up if your number of employees increases past 10, since HMRC does not offer any other type of payroll software system.

What Are The Limitations of Free Payroll Software?

The biggest limitation of free payroll software is the typical 10-employee limit. Free payroll software is also limited when it comes to its features, typically only offering HMRC form submission, tax calculation and payslip generation.

That’s why we recommend that you choose a free payroll provider that allows you to scale up from its free plan to a paid plan. As your business grows, you’ll find that it’s no longer sustainable to manually carry out payroll tasks and that you have too many employees to qualify for free software.

Free software does have its uses, however. It gives small businesses the ability to run payroll without any overhead fees. This is extremely helpful at the beginning stages of a business, when you might not have the funds to invest in advanced software, but still need to submit reports to HMRC.

When Should I Upgrade to Paid Payroll Software?

You should consider upgrading to paid payroll software when a free solution starts to limit accuracy, efficiency or compliance as your business grows.

While free payroll tools can work well for very small teams with simple pay structures, they’re not built for scaling and can quickly become restrictive once your headcount grows, or your payroll requirements become more complex.

Paid payroll software allows you to manage payroll for a larger number of employees and significantly reduces manual input. Therefore, it’s particularly worth upgrading if you’re spending too much time correcting errors, running calculations by hand or working around feature restrictions.

Compared with free tools, paid payroll software typically includes:

• End-to-end automation, including PAYE tax and pension deductions, statutory payments, and RTI submissions to HMRC.
• Multiple payroll runs, allowing you to pay different types of workers — such as salaried staff, hourly employees, and directors — within the same system.
• Advanced reporting, giving you clearer visibility over payroll costs, tax liabilities and historical data.
• Employee self-service portals, where staff can view payslips, update personal details, and request holiday without involving payroll administrators.
• Dedicated customer support, with access to phone, email or live chat support, rather than self-service help articles only.
• Integrations with other software, such as HR, time tracking, pensions and accounting platforms, helping to reduce duplicate data entry and errors.

Read more on payroll compliance in our guide.

How Much Does Payroll Software Typically Cost?

In the UK, payroll software costs are usually based on the number of employees included in payroll, not the size of your HR team or how many staff log into the system.

Entry-level payroll plans typically start at £10–£30 per month for small businesses running payroll for around 10–15 employees. This often works out at roughly £1–£2 per employee, per month, or £200–£300 per financial year, depending on the provider and features included.

For businesses processing payroll for up to 50 employees, monthly costs usually increase to around £50–£80. Larger payrolls — especially those requiring multiple pay runs, advanced reporting, or integrations with HR and accounting software — can expect to pay around £100–£200 per month.

Importantly, most providers charge per employee paid, rather than per system user. This means a business with a small HR or finance team but a large workforce will still see costs rise as headcount increases.

Payroll software vs payroll services

As an alternative to payroll software, you can also outsource payroll to a dedicated payroll service provider. These services handle some or all of the process on your behalf. This can be appealing for companies with limited internal expertise or those looking to reduce administrative workload.

Fully managed payroll services typically cost between £4–£25 per employee, per month, depending on the complexity of your payroll. Optional add-ons — such as pension auto-enrolment — usually cost an additional £1.50–£2 per employee, per month, while HR tools or integrations can add a further £10–£25 per employee, per month.

If you want help deciding whether outsourcing is a good option for your business, check out our article on the benefits of outsourcing payroll.

Buying Guide: What to Look for in Free Payroll Software?

Here’s what to look for when choosing free payroll software:

• HMRC approval: You should only use payroll software that has been approved by HMRC and is RTI (Real-Time Information) compliant.
• Scalability: Ideally, your free payroll software provider should offer paid plans that allow you to run payroll for more employees and calculate a wider variety of benefits and deductions. This avoids you having to switch to a new system.
• Hidden fees: Some providers claim to offer free payroll software, but charge fees for certain services, such as generating payslips or obtaining basic security features. As a result, it’s worth checking exactly which features are included for free and whether any paywalled essentials could push the overall cost higher.
• Automated calculations: Make sure the payroll software you choose can automate basic calculations, including income tax and NI, but ideally, statutory payments and pension contributions as well. If it doesn’t, you might as well skip the software and use a calculator.
• Updates and security: Ideally, your chosen payroll software should automatically update in line with changing legislation and adhere to international data security standards. Look for certifications such as ISO 27001.
• Ease of use and support: Free tools often assume a higher level of payroll knowledge, so prioritize options offering clear guidance, tooltips or documentation. Even limited access to help articles or HMRC-aligned prompts can significantly reduce the risk of errors, especially for first-time payroll users.

How Did We Research The Best Free Payroll Software?

Meet our Expert author