Outsourced Payroll 2026: UK Guide, Providers, Costs & Benefits Quick answer
Outsourced payroll means paying a specialist provider to run some or all of your payroll rather than managing every payroll task internally.
A provider can typically handle:
gross-to-net payroll calculations
PAYE and National Insurance
HMRC Real Time Information submissions
payslips
starters and leavers
statutory payments
pension auto-enrolment
year-end payroll
CIS payroll where required
payroll reports
Outsourcing is particularly worth comparing if payroll is taking too much internal time, becoming more complex, or depending too heavily on one employee.
Payroll option Best suited to
Payroll software
Simple payroll that you are comfortable running internally
Managed payroll
Businesses wanting professional help but retaining some internal control
Fully outsourced payroll
Businesses wanting the provider to run most of the payroll process
Payroll bureau/accountant
Small businesses wanting practical payroll processing
Global payroll
Businesses paying employees in several countries
Important: using a payroll provider does not remove the employer’s legal responsibility for PAYE. HMRC states that employers remain legally responsible for PAYE tasks even when a third party runs payroll on their behalf.
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This quote service is best for UK businesses that want to compare outsourced payroll, managed payroll, payroll software, payslips, pension support, CIS payroll or payroll services for growing teams.
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Compare outsourced payroll quotes Outsourcing payroll can save time, reduce errors and remove pressure from your internal team, but the right provider depends on your payroll setup.
Compare quotes if your business needs help with:
weekly or monthly payroll
PAYE and National Insurance
RTI submissions
pension auto-enrolment
digital payslips
starters and leavers
CIS payroll
statutory sick pay, maternity pay or paternity pay
payroll reports
year-end payroll tasks
employee self-service
payroll plus HR support
payroll software migration
Free quotes • No obligation • Compare UK payroll providers
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Payroll Cost Calculator UK Estimate your monthly payroll cost based on employee numbers, pay frequency, pension duties, CIS, payslips, reports and support level.
Pay frequency
Monthly Weekly Fortnightly Four-weekly Mixed payroll frequencies Weekly payroll usually costs more because it runs more often.
Payroll service type
Payroll software only Managed payroll service Fully outsourced payroll Payroll bureau / accountant Software is usually cheaper; outsourced payroll gives more support.
Business type
Office / admin business Retail / shop Hospitality / restaurant / café Construction / trades Care / healthcare Agency / variable staff Professional services Multi-site business Variable hours, shifts and CIS can increase payroll complexity.
Need workplace pension / auto-enrolment support?
No Basic pension submissions Full auto-enrolment support Includes pension assessment, contributions or pension file uploads.
Need CIS payroll?
No Yes, include CIS Useful for construction businesses paying subcontractors.
Variable pay complexity
Low: fixed salaries Medium: overtime / bonuses High: shifts, tips, commissions or allowances Hospitality, retail and sales teams often need more checks.
Payslip delivery
Digital payslips Employee portal Printed payslips Printed payslips can add admin and postage costs.
Need HR support?
No Basic HR advice Payroll + HR support Useful if you need contracts, absence, holiday or employment advice.
Reporting level
Basic payroll reports Management reports Advanced reports / costing / departments Departmental reporting can be useful for larger teams.
Need year-end support?
Yes No Includes end-of-year payroll checks and employee documents where relevant.
Setup / migration needed?
No setup needed Standard setup / migration Complex migration / multiple payrolls Changing provider mid-year may require extra setup.
Your estimated payroll costs
Estimated monthly cost
£0
Cost per employee/month
£0
Potential monthly saving
£0
Enter your payroll requirements to estimate your costs.
Recommendation will appear here.
This calculator is an estimate only. Actual payroll costs vary by provider, employee count, pay frequency, payroll complexity, pension duties, CIS, HR support, setup, integrations, reporting and service level.
How do we work?
Transparent, impartial, and data‑driven reviews made by a team of expert humans, never AI generated – here’s exactly how Compare Your Business Costs helps you find the best deals from trusted UK providers: click here
Authored by: Ally Cox (Business Technology & B2B Services Specialist 10+ Years’ Experience)
Reviewed by: James Ward (Telecoms Specialist, 12+ Years Experience)
Last Updated: September 2026
Outsourced Payroll Services
Provider Best for Strongest use case Watch out for
IRIS
UK businesses wanting outsourced or managed payroll
Payroll outsourcing, managed payroll and payroll software
Check package, implementation and support level
ADP UK
Mid-sized, large and global employers
Managed payroll, outsourced payroll, HRIS and global payroll
May be more complex than small businesses need
Employment Hero
SMEs wanting payroll plus HR tools
Payroll outsourcing, HR, employee self-service and automation
Check service level and payroll package
Moorepay
SMEs wanting payroll plus HR advice
Managed payroll, HR advice and payroll services
Compare contract terms and support
PayFit
SMEs wanting cloud payroll software with support
Payroll automation and HR features
Not always the same as full outsourcing
BrightPay
Small businesses and accountants
Payroll software and bureau-style support
May involve more self-management
Xero Payroll
Xero accounting users
Payroll linked to bookkeeping
Not a fully outsourced service
QuickBooks Payroll
QuickBooks accounting users
Payroll linked to accounting
Not a fully outsourced service
Sage Payroll
Sage users and small businesses
Payroll software and accounting integration
Internal admin may still be needed
OneAdvanced
Larger or complex organisations
HR, payroll and workforce management
May be too broad for simple payroll
Ciphr
HR-led payroll buyers
HR, payroll and people data
Check outsourced payroll service depth
Zellis
Enterprise employers
Large, complex UK and Ireland payroll
Usually not cost-effective for small firms
MHR
Mid-sized and larger employers
HR, payroll and workforce management
Better for broader HR/payroll projects
Key Takeaways
Outsourced payroll transfers much of the payroll administration to a specialist provider.
HMRC still holds the employer legally responsible for PAYE obligations even when payroll is outsourced.
Fully outsourced and managed payroll are not exactly the same service model.
Costs depend heavily on employee numbers, pay frequency, pensions, CIS, variable pay and service level.
Some providers price per employee; others use monthly, per-payslip or custom pricing.
Employment Hero currently publishes managed payroll at £12 per employee/month with a £120 monthly minimum.
IRIS offers both part-managed and fully managed payroll services.
Moorepay currently uses custom payroll/HR pricing.
Simple businesses may still be better served by payroll software or an accountant.
Compare what is included before comparing headline prices.
What Is Outsourced Payroll? Outsourcing payroll means appointing an external provider to perform payroll work that would otherwise be handled by your finance, HR or administration team, but the exact division of responsibility depends on the service.
A fully outsourced provider could handle:
receiving payroll changes from your business
calculating employee pay
applying tax and National Insurance
processing statutory payments
producing payslips
submitting payroll information to HMRC
processing pensions
providing reports
supporting year-end tasks
You usually still need to supply accurate employee information and approve the payroll before payment.
What Does HMRC Say About Outsourcing Payroll? HMRC explicitly
keeping employee records
producing payslips
running payroll calculations
supporting payments to HMRC
However, HMRC states that the employer remains legally responsible for completing PAYE tasks even when another company performs them .
This is an important distinction – a good outsourced payroll provider reduces administration and compliance risk, but you should still maintain oversight and provide accurate payroll data.
What Does an Outsourced Payroll Provider Do?
Payroll task Can usually be outsourced?
Salary calculations
Yes
PAYE
Yes
National Insurance
Yes
RTI/FPS submissions
Yes
Payslips
Yes
Starters/leavers
Yes
Statutory pay
Yes
Pension auto-enrolment
Usually
CIS
Provider dependent
Employee payments
Provider/service dependent
Year-end payroll
Usually
HR advice
Usually an add-on/separate service
Outsourced Payroll and HMRC RTI Every time employees are paid, payroll information normally needs to be reported to HMRC through a Full Payment Submission.
HMRC says the FPS should normally be sent on or before payday .
An outsourced payroll provider can manage this submission as part of the payroll run.
Before choosing a provider, confirm:
whether RTI submission is included
who checks the FPS
how corrections are handled
what happens if information arrives late
How Much Does Outsourced Payroll Cost in the UK? There is no single standard UK outsourced-payroll price.
Providers use several pricing models:
per employee
per payslip
per payroll run
monthly minimum
custom quote
Costs increase when payroll involves:
weekly rather than monthly pay
multiple payrolls
large employee numbers
CIS subcontractors
shift work
commission or bonuses
pensions
high starter/leaver volumes
HR support
advanced reports
Current Outsourced Payroll Pricing Example Employment Hero currently publishes one of the clearest UK managed-payroll prices.
Employment Hero service Current price
Core Payroll
£3 per employee/month
Managed Payroll
£12 per employee/month
Their Managed Payroll service currently has a £120 monthly minimum and includes end-to-end managed pay runs, HMRC reporting, RTI and pension enrolment which means ten employees would currently hit the £120 monthly minimum before any additional HR or workforce modules.
Estimated Payroll Cost by Employee Count Using £12 per employee/month purely as an illustrative managed-payroll benchmark:
Employees Illustrative monthly cost Annual cost
£10
£120.00
£1,440
£25
£300.00
£3,600
£50
£600.00
£7,200.00
100
£1,200
£14,400.00
This is not a universal market tariff. Other providers may quote differently and can include setup, pension, CIS or support charges.
IRIS Payroll Services Worth comparing for: businesses wanting a dedicated UK payroll-service team.
IRIS offers both part-managed and fully managed payroll models.
Its outsourced payroll service includes access to a payroll manager as a named point of contact and uses a wider team structure to provide continuity when that individual is unavailable.
IRIS describes fully managed payroll as a service where the business provides payroll data and final approval while the provider handles the payroll process.
Compare IRIS where:
you want payroll handled by specialists
a named payroll contact matters
you need UK payroll expertise
you want part-managed or fully managed options
Moorepay Worth comparing for: SMEs wanting payroll alongside HR and employment support.
Moorepay currently uses tailored pricing rather than publishing one fixed payroll price.
Its pricing proposition covers payroll, HR, benefits and analytics, with packages built around the organisation’s requirements.
This makes Moorepay super relevant where payroll sits alongside a broader HR requirement.
ADP UK Worth comparing for: mid-sized, larger and international employers.
ADP should generally be compared where payroll scale or complexity is beyond the needs of a small payroll bureau.
Typical use cases include:
large employee populations
multiple payrolls
international operations
HR/payroll integration
enterprise reporting
Smaller UK businesses should still compare simpler providers before choosing an enterprise payroll platform.
Employment Hero Managed Payroll Worth comparing for: businesses wanting cloud payroll plus a managed payroll professional.
Employment Hero currently charges £12 per employee/month for Managed Payroll, subject to a £120 monthly minimum.
The service includes:
end-to-end managed pay runs
managed HMRC reporting
managed RTI
pension enrolment
pension declaration support
they are particularly useful if you also want payroll connected to HR, timesheets or workforce software.
Fully Outsourced Payroll vs Managed Payroll These terms are sometimes used interchangeably, but providers can use them differently.
Fully outsourced Managed payroll
Payroll processing
Provider-led
Provider-supported/led
Internal involvement
Lower
Varies
Payroll approval
Usually business still approves
Usually business approves
Employee data
Business supplies changes
Business supplies/maintains changes
Best for
Businesses wanting payroll largely off their plate
Businesses wanting support plus visibility/control
IRIS, for example, explicitly distinguishes fully managed and part-managed payroll models.
Outsourced Payroll vs Payroll Software
Outsourced payroll Payroll software
Who runs payroll?
External provider
Your team
Internal admin
Lower
Higher
Cost
Usually higher
Usually lower
Expert payroll support
Core part of service
Support varies
Best for
Businesses wanting payroll handled
Businesses comfortable running payroll
If you only need software, products such as Xero Payroll, Sage, BrightPay and other HMRC-compatible payroll systems may be more appropriate than outsourcing.
Outsourced Payroll vs Accountant Payroll An accountant can be perfectly adequate for a small, straightforward payroll but a specialist outsourced payroll provider becomes more relevant where you need:
larger employee numbers
weekly or mixed pay frequencies
employee portals
dedicated payroll support
CIS
more detailed reporting
HR integration
high starter/leaver volumes
Who Should Outsource Payroll? Outsourcing is particularly worth comparing if:
payroll is taking too much internal time
your employee numbers are increasing
payroll depends on one member of staff
your business has weekly or multiple payrolls
you employ shift workers
you have frequent starters and leavers
you need CIS payroll
pension administration is becoming difficult
you need more reliable payroll support
your current accountant service is no longer sufficient
When Is Outsourcing Payroll Not Worth It? A fully outsourced service will be unnecessary if:
you have one or two straightforward employees
your accountant already handles payroll effectively
your payroll rarely changes
you are comfortable running payroll software
you want very close internal control
In those cases, compare software or accountant-led payroll first.
Benefits of Outsourcing Payroll
The main benefit is that recurring payroll work moves away from your internal team.
Payroll providers employ teams whose core role is running payroll and keeping up with payroll processes.
More consistent processes
Support with HMRC and pensions
Outsourcing reduces the risk of payroll depending entirely on one finance or HR employee being available each pay period.
Potential Downsides of Outsourcing Payroll
Potential downside What to check
Higher cost than software
Compare time saved against service cost
Less immediate control
Check data cut-off times
Third-party data handling
Review security and GDPR processes
Provider dependency
Ask about backup contacts and continuity
Extra charges
Check starters, leavers, pensions, CIS and year-end fees
Migration risk
Confirm implementation and parallel-run process
What Should You Ask an Outsourced Payroll Provider?
What exactly is included in the monthly price?
How are you charged: employee, payslip, payroll run or fixed fee?
Is there a minimum monthly charge?
Who will be our payroll contact?
What happens when that person is unavailable?
Who submits the FPS to HMRC?
How are payroll corrections handled?
Is pension auto-enrolment included?
Is CIS included?
Are starters and leavers charged separately?
Are digital payslips included?
Is employee self-service included?
Does the service include year-end work?
Can the service handle weekly payroll?
Can it handle multiple PAYE schemes?
What reports are included?
Which HR/accounting systems integrate?
What is the setup/migration fee?
What contract length applies?
What happens if we leave?
Switching Outsourced Payroll Provider Mid-Year You can change payroll provider during the tax year, but migration should be planned carefully.
The new provider may need:
employee details
tax codes
year-to-date gross pay
year-to-date PAYE and NI
student-loan deductions
statutory pay history
pension records
starter/leaver information
previous HMRC submissions
Ask whether the provider recommends:
a parallel payroll run
mid-year reconciliation
specific migration cut-off dates
Signs You Should Compare Outsourced Payroll Quotes It is worth getting quotes if:
payroll errors keep recurring
your current provider is slow to respond
payroll takes several hours every pay period
your business is hiring quickly
you are adding weekly or shift-based workers
you are introducing CIS
you want payroll plus HR support
your existing payroll process is too manual
you need stronger employee reporting
Compare Outsourced Payroll Quotes
Our Verdict: Is Outsourced Payroll Worth It? Outsourced payroll is most valuable when the cost and risk of running payroll internally are becoming greater than the cost of paying a specialist provider, so it is particularly worth comparing for:
growing SMEs
weekly payrolls
high-turnover workforces
construction/CIS
hospitality and retail
care and healthcare
businesses with several payrolls
businesses where payroll depends on one internal person
A very small business with simple monthly payroll may still be better off using software or an accountant.
The right comparison is therefore not simply “which payroll provider is cheapest?”
Compare:
how much work the provider takes off your team
what payroll responsibilities remain internal
support quality
HMRC/pension services
total annual cost
Compare Payroll Service Quotes
Free quotes • No obligation • Compare UK outsourced and managed payroll providers
Frequently Asked Questions What is outsourced payroll?
Outsourced payroll means paying an external provider to perform payroll work such as salary calculations, PAYE, National Insurance, RTI submissions, payslips and pension administration.
How much does outsourced payroll cost?
Pricing varies significantly. Some providers price per employee, while others use per-payslip, monthly or custom pricing. Employment Hero currently publishes Managed Payroll at £12 per employee/month with a £120 monthly minimum.
Does outsourcing payroll remove my PAYE responsibility?
No. HMRC states that employers remain legally responsible for PAYE tasks even if a payroll provider carries them out.
Does outsourced payroll include HMRC submissions?
Usually, but check the service. Fully managed providers commonly include RTI/FPS submissions as part of the payroll run.
Does outsourced payroll include pensions?
Many providers support pension auto-enrolment, contribution files and related administration, but confirm exactly what is included.
Can outsourced payroll handle CIS?
Some providers do. Construction businesses should specifically check CIS verification, subcontractor calculations, statements and returns before choosing a service.
Is outsourcing payroll better than payroll software?
It is better if you want a provider to take on payroll administration. Software is usually cheaper if your team is comfortable running payroll internally.
Is outsourced payroll suitable for small businesses?
Yes, especially when payroll is complex or time-consuming. Very small businesses with simple monthly payroll may find software or an accountant more economical.
Can I switch payroll provider during the tax year?
Yes, but year-to-date payroll records and previous submissions must be migrated accurately. Ask the new provider how it handles mid-year transitions.
What should I compare between payroll providers?
Compare service scope, pricing model, payroll frequencies, pensions, CIS, reports, integrations, support, migration costs and contract terms.
Related Payroll Guides Hi, I’m Ally Cox , a senior copywriter and blogger at CompareYourBusinessCosts.co.uk, the UK’s trusted platform for comparing business services.over a decade of experience in the B2B sector, I specialise in simplifying complex topics like leased lines, VoIP, business energy, HR and payroll solutions, accounting software, and EPOS systems .HR, copywriting, and business operations- from clocking-in systems to card machines and office technology .informed, confident decisions when choosing products and services that improve efficiency and save money.
