Written by Rob Binns Updated on 16 August 2022 To help you choose an ally for your payroll procedures, we compared seven HMRC-approved cloud-based payroll software companies in the UK to let you in on the cream of the crop. Cutting to the chase, our top pick for small businesses is Payroo, while medium-large businesses will be better off using IRIS KashFlow.We get it: processing payroll involves a lot of boxes to tick and getting everything right is a major concern for businesses of any size. Selecting one for yours can be daunting, especially because by and large, they all do the basics: pay calculation, tax deductions, auto enrolment, etc.That said, fear not: we can actually match you the payroll software companies best tailored to your needs if you take one minute – seriously, it’s that quick – to tell us what you're looking for via our free quote-matching tool. Through it, you can easily compare quotes from many providers sent directly to you.However, we can also let you know the findings of the research we conducted on this field, guided by our 10+ years of experience in the market, which is what you'll find in the rest of this article.We looked into the things that matter to you, such as price, features, support, suitability and ease of use. Each of the programs we surveyed excels in one of these criteria, so whichever is the key point to make you bite the bullet, don't worry: we've got you covered. Just read on to find out more. Find your payroll provider Compare and save The best cloud based payroll software for UK businesses: 01 | Iris KashFlow 02 | Ceridian Dayforce 03 | MyPAYE 04 | Sage Payroll 05 | Advanced 06 | Payroo 07 | 12 Cloud Swipe right to see more 0 out of 0 backward forward Iris KashFlow Ceridian Dayforce MyPAYE Sage Payroll Advanced Payroll Payroo 12 Cloud Best Best for medium-large businesses Best Best combined payroll and HR system Best Best for simple and affordable pricing Best Best for ease of use Best Best for a broad range of software products Best Best for small businesses Best Best free payroll software Price Range Core (min. 5 employees): £7.32/monthPlus Accounting (min. 5 employees): £25/monthExtra employees on both plans: £1.22/month per employee Price Range Bespoke Price Range £1/month per employee Price Range £7 – £102/month (set tiers go from 5 and 100 employees) Price Range Bespoke Price Range £5-£200/month (set tiers go from 1 to 500 employees; afterwards, each additional employee costs £0.5/month) Price Range Free for companies with up to 9 employeesFrom 10 employees onwards, £15/year per employee Pros The UK’s most popular payroll software solutionComprehensive, feature-rich system Pros Combined payroll and HR solutionSelf-service portal as standard Pros No contract — pay-as-you-goFree online support Pros 24/7 online customer supportFree telephone support Pros Pensions auto enrolment software as standardRostering and time and attendance options Pros Compatible with leading accounting software packages, such as SageFree CIS payroll software for the construction industry Pros Free for small businessesCompetitive pricing for larger businesses Cons Lack of 24/7 supportVideo tutorials for the platform are chargeable Cons No free trialUser interface loading is slow Cons No free trialAdd-ons are chargeable Cons Interface is not user-friendlyScalability is limited Cons No free trialPricing is not publicly advertised Cons Interface isn't greatNo 24/7 support Cons No 24/7 supportCompetitive pricing for larger businesses 1. Iris KashFlowBest for medium-large businesses Iris is a market leading brand with 38 years’ experience in the business services sector. 213,000 subscribers rely on the company’s online payroll software to pay over twomillion employees every year, so it’s fair to say that these guys know what they’re doing. But if you’re not convinced, Iris is available on a 14-day free trial. ★ ★ ★ ★ ★ Iris at a glanceRTI compliant24/7 supportFree trialHR software add-on✔✗✔✔Standout featuresThe UK’s most popular payroll software solutionComprehensive, feature rich systemDeep-dive reportingUnlimited users, employees and companiesMobile appWhy choose Iris?By choosing an industry giant such as Iris as your provider you can have peace of mind that the system works, and can be relied upon to deliver the highest levels of security. The pricing is competitive, and there’s an extensive library of how-to guides on the company’s website to help you install and manage your software. It offers a free trial, which puts it on par with Sage (though Sage's trial is longer) and in a better position than Advanced and Payroo, which don't offer it.PricingCore (up to 5 employees): £7.32/monthPlus Accounting (up to 5 employees): £25/monthExtra employees on both plans: £1.22/month per employee 2. Ceridian DayforceBest combined payroll and HR system Glasgow based company Ceridian offers an all-in-one time and attendance, payroll and HR solution called “Dayforce”. Dayforce won ‘Best Payroll Product of the Year 2012’ at the Payroll World Awards, and since then it’s gone from strength to strength with a host of new time-saving features. We particularly like Ceridian’s clean design and easy to use dashboards. ★ ★ ★ ★ ★ Ceridian at a glanceRTI compliant24/7 supportFree trialHR software add-on✔✔✗✔Standout featuresCombined payroll and HR solutionSelf service portal as standardComprehensive reporting with over 50 templatesWell designed with easy-to-use dashboardsMobile appWhy choose Ceridian?Unlike Iris KashFlow and Payroo (and as a matter of fact, most payroll software companies), it offers a combined HR and payroll solution for a single price, so that’s one of the big draws of Ceridian Dayforce. Plus, the built in “real-time error validation tool” can prevent you from making costly mistakes by alerting you to potential errors before commiting pay.PricingBespoke pricing. 3. MyPAYEBest for simple and affordable pricing MyPAYE is a cost-effective payroll solution for small and medium-sized businesses already using Xero accounting software. Data from Xero is pulled by the software to process payroll, and payroll figures are automatically posted as journal entries back into Xero. ★ ★ ★ ★ ★ MyPaye at a glanceRTI compliant24/7 supportFree trialHR software add-on✔✔✗✗Standout featuresNo contract — pay-as-you-goFree online supportOnline BACS paymentsEasily scaledSimple layout and easy to useWhy choose MyPAYE?If you’re looking for a no-frills, standalone online payroll software solution then you’ll be hard pressed to find a better option than MyPAYE. It's cheaper than Payroo and Sage – in fact, it's the cheapest among the paid ones we surveyed. Costing just £1 per month per employee, it can be easily integrated with a third-party accounting package, and timesheet and expenses features can be added for an additional charge of £1 per month, per employee (still a bargain).Pricing£1/month per employee Save by Comparing Payroll Services Quotes from Leading Suppliers Have you used Payroll Services before? Yes No 4. Sage PayrollBest for ease of use Sage is renowned for developing slick, user-friendly software for businesses — and its cloud based payroll solution is no exception. In fact, the company claims its programme is so intuitive it requires no training to use. Now, that’s a big claim, but one backed up by an impressive Trustpilot score of 4.6 out of 5. ★ ★ ★ ★ ★ Sage at a glanceRTI compliant24/7 supportFree trialHR software add-on✔✔✔✔Standout features24/7 online customer supportFree telephone supportIntuitive, easy-to-use softwareTop-notch HR and accounting add-onsEasy adjustments to previous pay runsWhy choose Sage?Sage’s suite of products spans payroll, accounting, CRM, HR and more; so the company really is a one-stop-shop for everything business software related, and users benefit from easy integration of these platforms. For the technophobes out there, 24/7 online support is a definite plus point, too. Also, it offers the longest trial among the companies we looked into (1 month) – beating players like Iris KashFlow, which offer shorter a shorter one, and Ceridian Dayforce, which doesn't even offer it.Pricing£7/month + VAT for 1 to 5 employees£12/month + VAT for 6 to 10 employees£17/month + VAT for 11 to 15 employees£27/month + VAT for 16 to 25 employees£37/month + VAT for 26 to 35 employees£52/month + VAT for 36 to 50 employees£77/month + VAT for 51 to 75 employees£102/month + VAT for 76 to 100 employees 5. AdvancedBest for a broad range of software products Advanced is one of the UK’s largest business software providers, with a colossal turnover of £220m and 20,000 customers nationwide. But what sets Advanced apart from the competition is its dedicated support center with 300 staff on hand to answer your every question. If you require help with setting up and managing your IT systems, Advanced is an excellent choice of supplier. Advanced at a glanceRTI compliant24/7 supportFree trialHR software add-on✔✔✗✔Standout featuresPensions auto enrolment software as standardRostering and time and attendance optionsIn-depth reportingEasy integration with other Advanced business software productsDedicated support centre with 300 staffWhy choose Advanced?Advanced’s cloud payroll software does everything you need it to, and it does it well. But the main advantage of choosing this company as your provider is the wide range of business software products on offer. Whether you’re looking financial management software or CRM, Advanced has a solution to meet your needs, and systems can be integrated seamlessly for a unified business platform. It doesn't offer a free trial like Sage and Iris KashFlow, which combined with the fact that its pricing is bespoke, can delay knowing if it's right for you. Similarly to Sage, however, Advanced offer in-depth reporting which can especially benefit larger companies.PricingBespoke pricing. 6. PayrooBest for small businesses Payroo's competitive prices make it an excellent choice for small businesses — especially for those that have fewer than 10 employees, which can benefit from a very compartmentalised pricing table. However, the system can be easily scaled to meet the needs of larger businesses. ★ ★ ★ ★ ★ Payroo at a glanceRTI compliant24/7 supportFree trialHR software add-on✔✗✗✗Standout featuresCompatible with leading accounting software packages, such as SageFree CIS payroll software for the construction industryMobile appWhy choose Payroo?Payroo is a classic example of substance over style. It might not look as slick as likes of Sage or Ceridian, but it delivers everything you want from a payroll cloud solution. For small businesses in particular, pricing is broken down is very specific tiers tied to the number of employees, which is handy to keep costs down. That said, it can be easily scaled as you take on more employees, as the tiers get broader. We like Payroo a lot.PricingPayroo's pricing is largely tier-based. Prices start at £5/month + VAT for up to 2 employees and progressively increase per number of employees. There are 15 tiers in total, so we won't list all of them, but some examples follow below:£15/month + VAT for 6 to 9 employees£25/month + VAT for 10 to 15 employees£50/month + VAT for 31 to 50 employees£70/month + VAT for 81 to 100 employees£120/month + VAT for 151 to 200 employees£200/month + VAT for 301 to 500 employeesFrom 500 employees onwards, each additional employee costs £0.5/month + VAT In Case You're Wondering... Unlike traditional desktop-installed programs, cloud-based payroll software is charged on a monthly basis, which reduces your upfront costs massively.It allows you to file PAYE reports with HMRC in real time, ensuring your business stays fully compliant with industry regulations. There are clever tools for calculating pay and, crucially, information is stored online where it’s available to access at any time, from anywhere. 7. 12 CloudBest free payroll software 12 Cloud's one of the few providers approved by HMRC to offer free payroll software for businesses with fewer than 10 employees. It offers a comprehensive payroll software with feature-rich dashboard interfaces for quick access to commonly used functions. One feature we particularly like is the “Rollback facility”, which makes it easy to correct mistakes and re-run pay with minimal effort. ★ ★ ★ ★ ★ 12 Cloud at a glanceRTI compliant24/7 supportFree trialHR software add-on✔✗✔✗Standout featuresFree for small businessesCompetitive pricing for larger businessesFree phone support within working hoursCompatible with accounting packages, such as Sage“Rollback facility” for easily amending errors in payWhy choose 12 Cloud?Like Payroo, 12 Cloud is an HMRC approved free payroll software provider for businesses with fewer than 10 employees. Unlike Payroo, the company has spent big on the front-end development of its system, and this shows in the intuitive layout of the dashboards. As a middle ground between Sage and Payroo, 12 Cloud is an excellent choice of provider.PricingFree for up to 9 employees£10/year per employee for 10+ employeesExpert VerdictSo, now that you’re more familiar with cloud payroll software providers, how do you go about choosing the best one for your business? Well, it’s all about size. Large businesses will be best served by an established provider such as Iris or Ceridian. These companies’ solutions are tried and tested in a multinational setting and can be relied upon to perform.Medium sized businesses will be hard pressed to find a better option than Sage. Sage’s software has a clean design and is easy to use. Plus, it can be integrated easily with the company’s accountancy and HR modules.Small businesses should look no further than Payroo. Payroo has all the functionality you require to process payroll online, and it’s free. Free! Need we say more? Need a quote? Now that you know the best cloud-based payroll software in the UK, wouldn't it be handy to receive bespoke quotes from the most suited to you? If that sounds like a plan, just follow our 3-step guide on how to get those!Step 1: Fill in our short form — it only takes a minuteStep 2: We use the information you provide to match you with the most suitable suppliers for your business — they’ll be in touch with no-strings-attached quotesStep 3: You save money by comparing prices — yes, that simple! Compare payroll software quotes from leading suppliers Get Free Quotes FAQs1. What is cloud-based software?Put simply, cloud-based software is software stored on a server and accessed over the internet, rather than your computer’s hard drive. You can think of it as the equivalent of watching a film on Netflix compared to watching it on a DVD, or using Google Docs instead of Word.2. Why choose cloud-based payroll software?A cloud-based payroll solution has benefits for both you and your employees. Here are five of them:✔ Better access to informationCloud-based software gives authorised employees the flexibility to access their information at any time via a self-service portal. They can easily update personal details, view payslips, and even submit holiday requests. Managers can view and approve these requests without having to go through HR.✔ Auto updatesA cloud-based system is updated centrally by your provider, which means no more faffing about with installation CDs or downloads. Not only does this save you a lot of time and bother, it ensures that you remain compliant with ever-changing government regulations.✔ Easy integration with other systemsProviders such as Sage and Iris offer dedicated accountancy and integrated HR and payroll solutions which can be easily integrated with payroll software to form a more complete business platform. This helps to streamline administrative processes by allowing you to share employee information across systems, rather than make duplicate data entries.✔ Avoid fines for non-complianceFollowing the introduction of the government’s Real Time Information (RTI) programme in 2013, you are required to submit PAYE information to HMRC every time you pay employees, not monthly. Failure to do so will result in a hefty fine. But fear not, cloud-based software automatically generates these reports for you, and you can file them with the click of a mouse.✔ ScalabilityCloud payroll is charged per employee, so it has the flexibility to grow with your business as you take on more staff. And better still, there are 11 HMRC approved suppliers that provide free payroll software for businesses with fewer than 10 employees. Written by: Rob Binns Senior Writer Rob writes mainly about the payments industry, but also brings to the table industry-specific knowledge of CRM software, business loans, fulfilment, and invoice finance. When not exasperating his editor with bad puns, he can be found relaxing in a sunny (socially-distanced) corner, with a beer and a battered copy of Dostoevsky.