7 Best Payroll Solutions for Your Small Business

With the HRMC requiring your expenses and benefits report as well as your P11D submissions in July, small businesses that lack a dedicated HR or accounting team can greatly benefit from a payroll system, as they can help you keep on top of these (and other) important dates and remain compliant with the law.

According to our independent research, Moorepay is the best payroll company in small businesses. It tops our ranking largely on the account of its expert-based advice: Moorepay makes the life of small business owners considerably easier by allowing them to contact consultants that can clarify any issues related to payroll.

With nearly 15 years covering the market, we know how important it is for you to find a provider that not only does the job within your budget, but also gives you the chance to scale and accommodates the specific needs of your venture.

To help you choose the one best suited to your needs, we've prepared this detailed ranking with our top seven picks. If you'd like to know more about them, just head below.

Prices correct as of May 2023

1. Moorepay

Moorepay offers an easy-to-use platform with integrated payroll and HR solutions. It gives you access to UK-based payroll specialists who are available to help you with any queries, making it easier for you to get started and avoid major problems when it comes to paying your contractors.

Moorepay’s onboarding process is simple, which is great if you’re not super tech-savvy, or you want to avoid a steep learning curve. Also, like ADP, Moorepay provides CIPP-accredited expert payroll advice and offers tax-related educational resources.

Unfortunately, it doesn't allow for payment of international employees nor does it offer live training – features our experts have found in Iris Staffology.

2. ADP

ADP has been in the payroll business for a long time, and this expertise has brought about great payroll and hiring solutions. You can integrate third-party solutions such as QuickBooks, ClockShark, and Wave to create one seamless platform to manage various aspects of your business.

Like Advanced, it also packs a powerful native suite of associated programs. This is very useful for businesses keen on keeping the number of their suppliers low, thereby saving money. Out of its native software, ADP’s hiring solution really stood out to our researchers. With it, you can run background checks, schedule interviews and send out contracts.

ADP allows you to scale as and when you need to, which means you don’t need to pay for solutions and features you don’t use. As your business grows, so does the platform. ADP’s pricing is also flexible, so you won’t find yourself stuck in an unsuitable contract. That said, it's provided only through quoting, unlike Iris Staffology's, which is advertised.

3. Advanced

Advance gives you the tools you need to deal with your payroll accurately and efficiently. As per our independent review, one of its selling points is its wide training tools, which are a plus if you're running a small accounting team.

Its live training feature is noteworthy, allowing you to have lessons with provider's personnel to get a grasp of its system quite quickly. Moorepay, for instance, doesn't offer this – although Iris Staffology does.

Furthermore, Advanced's software can be integrated with HR, attendance and finance solutions, providing you with one comprehensive platform.

4. TopSource

TopSource deals with every aspect of payroll from registering with HMRC to end-of-year processing. Unlike ADP, it doesn't offer a part-managed version, being only available as a fully-managed payroll solution.

If you have a global businesses, or plan to expand internationally, TopSource is a good choice as it offers compliant payroll services in over 150 countries.

Like MHR, it provides in-depth reporting. Conveniently, TopSource's Portico app that can be accessed at any time, and from anywhere. Having easy access to your payroll data makes it easy to keep a close eye on the ins and outs of the process – essential for business owners that accumulate the job of their company's accountant.

The pricing is bespoke, so its difficult to judge from the outset if it will fit into your budget. Other providers such as Payescape offer transparent pricing, but this is still rare in the payroll world.

5. Iris Staffology

Iris Staffology packs more accounting and HR integrations than any of the providers we researched (seven and five, respectively) – which allows it to work alongside more programs than ADP (three and three) or MHR (one and three). This benefits businesses owners who want to keep their current accounting or HR software and integrate them with Iris Staffology.

Iris Staffology ensures your business complies with legislation around Automatic Enrolment, making sure you stay compliant. The platform also deals with all deductions, such as NI and statutory tax, offering business owners peace of mind by helping them stay on top of these.

On the other hand, Iris Staffology does not offer all of the steps necessary for year-end features such as, your final payment submissions (FSPs). Moorepay does offer this however it tends to be a pricier provider.

6. MHR

MHR is an established provider in the payroll and HR industry. One of its unique features is an emergency payroll support features, where MHR will step in to provide added consultation if your team are feeling overwhelmed. This extra support is helpful for businesses who are going through complex changes or a wider expansion. In these times, it can be helpful to have the backing of added support whenever your businesses needs it.

MHR also boasts one of the most detailed report-generating on the market. It covers anything from salary modelling to insights on employee engagement and performance management. For businesses owners keen on making the most out of their employee data, this is a key asset. However, we note that, due to its sheer breadth, this makes MHR more suited to large businesses, as such deep reporting prowess is likely to be lost in smaller organisations.

If you don't want to outsource your payroll services fully, MHR is a good choice, as it offers you the choice to opt for in-house, outsourced payroll or a combination of the two. This makes MHR more flexible than solely fully-managed provider such as TopSource and means you're free to pick the right option for your businesses' unique needs.

7. Payescape

Payescape offers payroll, HR, and time management solutions all on one platform, giving you a streamlined and efficient way to manage your business. You can approve and monitor holidays, record working hours, and calculate wages with this provider.

When paying contractors, it’s important to ensure you’re tracking working hours correctly. Payescape’s time management solutions, which are built into the platform, make it easy for you to prevent under or over paying an employee. They also mean you can manage compliance risks and projects more effectively.

Payescape offers the most flexible contract among the providers our researchers looked into. You can sign up for monthly or even weekly tenures. This lack of a long-term commitment makes it suitable for small businesses that are finding their feet and don’t want to be tied to a contract.

Also, unlike competitors such as ADP and MHR, Payescape advertises its prices, which makes it a natural choice for businesses that want to know this information right away to promptly make a decision on whether or not to choose this provider.

How much does payroll outsourcing cost for a small business?

Prices vary a lot but as a general guide, a business with 10 employees can expect to pay:

• £70-£80 a month for a fully managed service with hosted software
• £40-£60 for simple outsourcing

Generally, the fewer employees, the higher your per person payroll costs will be.

How to choose between payroll service providers

At this point you will have a clear idea of the type of outsourcing service you require – and you may even have a provider in mind. The next thing to consider is cost.

Payroll is a competitive industry, and prices vary a lot. So to ensure you’re getting the best deal for your business it’s important you compare quotes from multiple providers. That’s where Expert Market can help.

Simply click on the button below to fill in our webform and we’ll send you same-day quotes from up to six of the UK’s leading payroll service providers. The whole process takes less than a minute. It’s completely free and there’s no obligation to go with any of the companies we match you with.

So sit back and let us take the hassle out of finding the best payroll solution for your small business, because you’ve got better things to do with your time.

What should payroll services offer?

Payroll solutions involve you outsourcing some or all of your payroll administration work to a specialist third-party company.

Choose between:

Fully-managed payroll service — it does what it says on the tin. Full service payroll companies take full control of all aspects of payroll — from paying employees, to issuing payslips, generating reports and filing papers with HMRC. You can rest easy knowing your business is fully compliant with regulations.

Part-managed payroll service – a service provided by a ‘payroll bureau’ and a helping hand for businesses that want to retain some control of the process. Imagine you’re happy to continue paying your staff, but you’d like a bit of help when it comes to filing documents at the end of the tax year. A payroll bureau offers you that kind of flexibility – and at a bargain price compared to a fully managed option.

Hosted payroll software – a secure and efficient way of storing and updating data. Even if you have an experienced bookkeeper working for you in-house, your business could benefit from cloud-based payroll software. Set up alerts for missing or required data or easily distribute payslips via email. You can track expenses claims and benefits safe in the knowledge that everything is backed up on secure servers.

What should payroll software offer?

Payroll software can be as simple or as comprehensive as you like. At a basic level, payroll software provides you with the tools to run payroll automatically. This means less manual errors and monthly stresses. Running payroll accurately and on time is key to running your business smoothly.

Some payroll software also offer automations, employee portals and HR tools.

If you have contractors or freelancers that you want to pay differently, such as weekly or on an ad-hoc basis, look for software that will allow you to do this.

Payroll outsourcing: what are the benefits?

Five reasons why outsourcing your payroll makes total sense for small business owners:

1. It will save you money. Despite the fees, outsourcing payroll is actually a more cost effective option for small businesses than hiring trained staff to do the work in-house.
2. It will save you time. Pension, tax, BACS, payslips, National Insurance, RTI, reporting, holiday, benefits — just a few of the things you’ll need to take care of if you choose to handle payroll yourself. Oh, and don’t forget everything else you’re supposed to be doing.
3. It will save your neck. Filing payroll documents late or with inaccurate information can incur a hefty penalty fine. Don’t give HMRC another reason to come after you.
4. It reduces error. An underpaid worker is an unhappy worker. Payroll service providers get things right, first time.
5. It’s watertight. Because you don’t have time to scrutinise the figures each month. Sophisticated software can alert you to time and rates abuse and other shady dealings.

Important payroll dates recap

Important payroll dates lie on the horizon, with many major ones happening in July. Payroll system can certainly help you keep on top of them, but in any case, it pays to be aware of them. To help you out, here's a brief recap of the most important payroll dates.

• 5 April

– The 2022/2023 tax year ended.

– Deadline for payroll software update.

• 6 April

– The 2023/2024 tax year began.

• 19 April

– Deadline for final 2022/2023 tax year reports submission.

• 22 April

– Deadline for the month 12 Pay-As-You-Earn (PAYE) payment.

• 31 May

– Deadline for your employees to receive their P60s (earning statements).

• 6 July

– Deadline for expenses and benefits report to the HRMC.

– Deadline for P11D and P11D(b) forms submission.

• 19 July

– Deadline for Class 1A National Insurance contributions on benefits in kind payment (if you're not using digital systems to do so).

• 22 July

– Deadline for Class 1A National Insurance contributions on benefits in kind payment (if you're using digital systems to do so).

Our methodology: How did we decide on the best payroll software?

Five researchers carried out in-depth research into payroll software platforms according to a comparison framework specially developed for this analysis. For each provider, we've asked these questions:

• How much control does it give you over your payroll process?
• How secure is it? What security measures does it take to protect your data?
• How much help and expertise does it offer when it comes to taxes and compliance?
• How scalable is the product? Can it grow alongside your company?
• How helpful is its customer support offering?

We've factored all these questions into our rating system and come out with a ranking of the best payroll software platforms.