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Payroll Services: Managed & Outsourced Costs Compared 2023
In this article we compare 7 of the UK’s best payroll service providers including:
Access Group Payroll Services
What are Payroll Services?
Payroll services are companies that manage payroll for a company. These firms can help businesses save time and money while providing compliance with tax laws.
Some of the best UK payroll services offer many features, including employee self-service and reporting. They can also provide seamless integration with other business software networks.
Payroll is complicated; even minor errors can cost the business money. Outsourcing payroll can eliminate the risk of mistakes and compliance penalties while saving businesses time and money.
A managed payroll service will allow companies to focus on core business activities. This can be especially beneficial for businesses that need more resources to hire a full-time payroll manager.
A good payroll provider will be able to provide you with a comprehensive package that includes calculating state and federal taxes, filing reports, and paying employees on time. Additionally, a good provider can advise you on how to handle different payroll issues.
Another benefit of outsourcing payroll is the protection of personal data. Payroll information can include sensitive information such as national insurance numbers, bank account details, and names and addresses. A good bureau can protect this data from unauthorised access and ensure it is stored securely.
Are There Any Downsides to Using Payroll Services?
A significant disadvantage of using payroll services is the cost. The service providers charge a fee for their expertise and work. This could prove costly, primarily if the firm uses payroll services for all its operations.
The payroll services industry includes companies that issue paychecks, make payments to employees’ accounts, and file taxes and reports for their clients. They also act as depositors and intermediaries for employment tax funds, determining how much of each lump sum should be directed to various government agencies.
Another problem is the potential for fraud. Whether identity theft or embezzlement, these crimes can have severe consequences for the employer and its employees. A top payroll firm will have high-quality security measures to protect its clients’ data and prevent these breaches. However, asking any prospective provider about these security arrangements is essential. Also, check if the service offers a dedicated account manager to handle any problems.
Should You Use a Payroll Service?
Using a payroll service offers several benefits, including accurate and timely processing of payroll, compliance with tax regulations and employment laws, reduced administrative burden, enhanced data security, access to expert support, and the ability to focus on core business activities. It ensures payroll calculations, tax deductions, and record-keeping are handled efficiently, minimising errors, saving time, and providing peace of mind for employers.
Using a payroll service provider can reduce the burden on human resources teams. The providers can calculate and deduct employment taxes, provide paychecks, make direct deposits and handle year-end tax filings. They also offer several other services, such as workers’ compensation administration, wage garnishment management and PTO tracking tools.
Most services have payment options, like paper checks and prepaid debit cards. Some services even allow for multiple wage rates, tax deductions and court-ordered wage garnishment payments. In addition to running payroll, many services can assist with filings and compliance management and help resolve inquiries from HMRC.
However, despite the benefits of outsourcing payroll tasks, there are some downsides to using a payroll service. One primary concern is that a third-party company has access to financial and tax information about the business. Also, the business is still liable for any penalties for an error. Moreover, these services typically require a monthly fee or a yearly contract and are costly.
What Industries Can Benefit From Using Payroll Services?
Various industries can benefit from using a payroll service. These include small and medium-sized businesses across retail, hospitality, healthcare, manufacturing, professional services, construction, and technology sectors. Additionally, industries with complex payroll requirements, such as those with seasonal or part-time employees, multiple locations, or specialised pay structures, can particularly benefit from the expertise and streamlined processes offered by payroll services.
A payroll service company can reduce the time you or your employees spend on payroll, which leaves more time for you to focus on other important tasks like marketing or new product development. Plus, your payroll is handled by a team of experts with the best software and experience.
Another advantage of using a payroll service is that it’ll handle any compliance issues, like filing required HMRC documents and reporting to the Pension Regulator. These requirements constantly change, and many small business owners cannot keep up with them independently.
Some payroll services offer additional HR services, such as employee self-service and PTO management. To find the right provider for your business, reference any UK payroll service companies and compare their customer support policies, such as their response times and the types of questions they answer.
How Much Do Payroll Services Cost in the UK?
The cost of payroll services can vary depending on several factors, including the business size, the number of employees, the complexity of payroll requirements, and the specific services and features included. Generally, payroll service providers charge a base fee that can range from a few hundred to several thousand pounds per year, along with additional fees per employee or per payroll run
Payroll Services Cost Considerations
|Per Employee Per Month||Some payroll service providers charge a fixed fee per employee per month. The cost can range from £2 to £10 or more, depending on the level of service and additional features included. This pricing model is often suitable for small businesses with few employees.|
|Flat Fees:||Some payroll providers offer flat monthly fees based on the complexity of your payroll requirements. These fees can range from £20 to £200 or more, depending on factors such as the number of employees, payroll frequency, and additional services required.|
|Additional Services:||Additional services such as pension administration, HMRC compliance, handling tax forms, and year-end reporting may come at an additional cost. The pricing for these services can vary depending on the complexity and volume of work involved.|
|Customised Pricing:||For larger businesses or those with more complex payroll needs, payroll service providers may offer customised pricing based on factors such as the number of employees, payroll frequency, industry-specific requirements, and integration with other systems.|
Who are the Main Providers of Payroll Services in the UK?
ADP Payroll Services
Who are ADP
ADP (Automatic Data Processing) is a global provider of human capital management (HCM) solutions, including payroll services, HR management, benefits administration, and workforce management. Founded in 1949 and headquartered in the United States, ADP serves businesses of all sizes across various industries worldwide.
ADP’s payroll services encompass end-to-end payroll processing, tax calculations, wage garnishments, direct deposit, and payroll reporting. They also offer additional HR solutions such as time and attendance tracking, benefits administration, talent management, and HR analytics. ADP’s services are often delivered through their cloud-based platform, which provides businesses with self-service portals for employees to access their pay statements, tax forms, and other relevant information.
With their extensive experience and global reach, ADP has established itself as one of the leading providers of payroll and HR services, serving millions of businesses globally. Their solutions aim to help organisations streamline their HR processes, ensure accurate and timely payroll, and comply with local tax and employment regulations.
Features of ADP
- Global implementation team – there are thousands of ADP professionals in 140 countries
- Compliance ready – Their software has compliance built-in, and they have over 8,500 compliance professionals to help keep you compliant
- EU data protection approved – They are one of the very first companies to receive European Union Data Protection Authorities’ approval to implement Binding Corporate Rules (BCRs) as both data processor and data controller.
- Proven services – they have the experience and scale to customise HCM solutions for businesses of all sizes.
- Trusted provider – Their payroll solutions are approved by BACS and recognised by HMRC to pay salaries, benefits and make deductions on your behalf.
Sage Payroll Services
Who are Sage
Sage is a multinational enterprise software company specialising in providing business management solutions. Founded in 1981 and headquartered in the United Kingdom, Sage offers a wide range of software and services for various aspects of business operations, including accounting, payroll, HR, ERP (Enterprise Resource Planning), and CRM (Customer Relationship Management).
Sage is particularly known for its accounting and payroll software. They provide intuitive and feature-rich solutions tailored for businesses of all sizes, from small businesses to large enterprises. Sage’s payroll software enables businesses to efficiently manage payroll processes, including calculations, tax deductions, and generating payslips. It helps automate payroll tasks, ensure compliance with payroll regulations, and provides reporting and analytics capabilities.
In addition to payroll, Sage offers accounting software that assists with financial management, budgeting, invoicing, and reporting. Their software is designed to simplify financial processes, improve accuracy, and provide insights into business performance.
Sage has a global presence and serves customers in various industries. Their solutions are used by businesses worldwide to streamline their operations, enhance financial management, and make informed business decisions.
Features of Sage
- Accounting – manage invoicing, cash flow, payments and tax through the cloud on any of your devices.
- Payroll – their effortless cloud based payroll solutions are ideal for start-ups and small businesses
- HMRC registered – secure, accurate and compliant. Be confident that you comply with the very latest legislation for the tax year.
- Sage HR – allows you to manage and engage with your workforce no matter where they are
- Flexible – Process weekly, bi-weekly and monthly payrolls, helping you pay staff quickly
- Manage payroll for up to 100 employees, get all the same features in each payroll tier.
- Pensions – Automatically assess and enrol your employees into workplace pensions, including salary sacrifice pension schemes.
Paychex Payroll Services
Who are Paychex
Paychex is a leading provider of payroll and human resources (HR) solutions for businesses of all sizes. Paychex provides services in the United Kingdom. While Paychex is primarily known as a leading provider of payroll and HR solutions in the United States, they also offer their services to businesses operating in the UK and other international markets.
Paychex provides payroll services that encompass payroll processing, tax calculations, tax filing, and direct deposit. They offer flexible solutions to accommodate various pay frequencies and payment methods. Their services also include features like wage garnishments, deductions, and customised payroll reporting.
In addition to payroll, Paychex offers HR services that cover areas such as employee benefits administration, time and attendance tracking, HR compliance assistance, recruiting and applicant tracking, employee onboarding, and retirement services. They provide self-service portals for employees to access their pay stubs, tax forms, and HR-related information.
Paychex serves businesses across industries and sizes, from small startups to large enterprises. Their solutions are designed to simplify payroll and HR processes, ensure accuracy and compliance, and enable businesses to focus on their core operations. With their extensive experience and range of services, Paychex has established itself as a trusted provider of payroll and HR solutions.
It’s worth noting that while Paychex does offer services in the UK, their presence and market share may not be as significant as some of the local payroll providers or well-established international providers in the UK market.
Features of Paychex
- Scalable – solutions that grow as you do
- Time saving solutions – Hire, manage, pay and retain employees with confidence
- Expertise – in compliance, with you every step of the way.
- Experience – over 730,000 businesses use Paychex to manage HR, Payroll, benefits and more
- Flexible – bundles to fit any sized business with customised solutions for support beyond payroll
- Simple – you can automate tax payments and simplify HR with benefits and payroll integrations
Moorepay Payroll Services
Who are Moorepay
Moorepay is a UK-based provider of payroll and HR solutions for small and medium-sized businesses (SMEs). Established in 1966, Moorepay specialises in delivering comprehensive payroll and HR services to help organisations efficiently manage their workforce and navigate complex HR regulations.
Moorepay’s services include payroll processing, tax calculations, employee data management, compliance management, HR administration, and employee self-service portals. They offer flexible payroll solutions tailored to the specific requirements of businesses, ensuring accurate and timely payroll processing while maintaining compliance with payroll legislation.
In addition to payroll, Moorepay provides HR services that cover areas such as employee contracts and documentation, absence management, performance management, employee benefits administration, and HR reporting. Their solutions aim to streamline HR processes, enhance efficiency, and provide businesses with the tools and support they need to effectively manage their workforce.
Moorepay focuses on delivering personalised customer service and support to their clients. They understand the challenges faced by SMEs in managing payroll and HR functions and aim to provide reliable, scalable, and cost-effective solutions that meet their specific needs.
As a trusted provider in the payroll and HR industry, Moorepay serves businesses across various sectors and has built a reputation for their expertise, compliance knowledge, and customer-centric approach to payroll and HR services.
Features of Moorepay
- Quality advice – Highly experienced payroll experts on-hand when you need them, accredited by the CIPP’s Payroll Assurance Scheme.
- Quality processes – Quality payroll processes, expert data validation, and timely submissions to HMRC – they take care of it all for you.
- Qualified – you get one-to-one UK based support with CIPP, CIPD and NEBOSH qualified experts
- Trustworthy – Software that is backed by Microsoft Azure and monitored by BITsight. They are PAS, ISO and BAB accredited.
- Quality outsourcing – Outsource your payroll to the experts and enjoy the peace of mind that comes from guaranteed compliance.
MHR Payroll Services
Who are MHR
MHR (formerly known as MidlandHR) is a UK-based provider of HR and payroll solutions. Founded in 1984, MHR specialises in delivering software and services to support the management of HR processes and payroll functions within organisations.
MHR offers a comprehensive suite of solutions designed to streamline HR operations, improve efficiency, and enhance employee engagement. Their offerings include HR management systems, payroll software, talent management solutions, workforce planning tools, time and attendance systems, and employee self-service portals.
MOHR’s HR and payroll solutions cater to businesses of all sizes, from small and medium-sized enterprises (SMEs) to large corporations. Their software is designed to automate routine HR tasks, ensure accurate and timely payroll processing, facilitate compliance with employment regulations, and provide HR analytics for data-driven decision-making.
In addition to their software solutions, MHR provides professional services such as implementation, training, and ongoing support to help organisations maximise the value of their HR and payroll systems. They also offer managed payroll services for businesses that prefer to outsource their payroll processes.
MHR has established itself as a trusted provider in the HR and payroll industry, serving a diverse range of clients across sectors such as healthcare, education, retail, manufacturing, and more. They focus on delivering innovative technology solutions and providing exceptional customer support to meet the evolving needs of their clients.
Features of MHR
- Family owned – they have the freedom to invest in their own research, development, support and testing.
- Experienced – They have been around the forefront of payroll advancements since the 1980s.
- Customisable – their leading integrated HR and payroll solutions make it easy to get your job done.
- Time-saving – Save time by eliminating manual processes, multiple systems, spreadsheets and admin
- Bespoke – tailored software and services to increase your business resilience
The Access Group Payroll Services
Who are The Access Group
The Access Group is a technology company that provides software solutions and services to businesses across various industries. Established in 1991 and headquartered in the United Kingdom, the Access Group offers a wide range of products, including enterprise resource planning (ERP), finance and accounting, HR and payroll, customer relationship management (CRM), supply chain management, and business intelligence solutions.
The Access Group caters to businesses of all sizes, from small and medium-sized enterprises (SMEs) to large corporations. Their solutions are designed to streamline business operations, improve efficiency, and drive growth. They provide industry-specific solutions for sectors such as manufacturing, distribution, professional services, education, and not-for-profit organisations.
In addition to their software offerings, the Access Group provides services such as implementation, training, support, and consultancy to ensure smooth adoption and ongoing success for their customers. They aim to deliver integrated solutions that connect different aspects of a business and empower organisations to make data-driven decisions, enhance productivity, and optimise performance.
The Access Group has grown through a combination of organic growth and acquisitions, expanding their portfolio of solutions and customer base. They serve a diverse range of industries and have a presence in multiple countries, including the UK, Europe, and Australia.
Features of The Access Group
- Scalable – Designed for companies with 250+ employees, Access PeopleXD offers you limitless growth and scalability so you always stay ready for the future.
- Data Visibility: All your HR analytics viewed the way you need it to make faster informed decisions
- Build a Future-Ready Workforce: Attract and retain top talent
- Improve Employee Experience – Check pay and request holidays (and more!) using our app – Available on the App Store and Google Play store
- Integrated Tools: No more siloed systems – everything you need joined up, in one place
- Empower Your People: Remove bottlenecks, reduce queries and eliminate frustration
- Streamline HR: Automate manual processes and increase efficiencies
- Drive Engagement: Build a culture of fulfilment, achievement and belonging
Ceridian Payroll Services
Who is Ceridian?
Ceridian is a global human capital management (HCM) company that provides software and services to help organisations manage their workforce and HR processes
Ceridian offers a comprehensive suite of HCM solutions, including payroll processing, HR management, talent management, workforce management, and benefits administration. Their flagship product, Dayforce, is a cloud-based platform that integrates various HR functions into a single system, providing businesses with a unified and streamlined approach to managing their workforce.
Dayforce offers features such as payroll processing, time and attendance tracking, HR administration, benefits management, talent acquisition, and workforce planning. The platform is designed to enhance efficiency, improve compliance, and provide real-time data insights to enable data-driven decision-making.
Ceridian focuses on providing innovative technology solutions and personalised customer support to meet the unique needs of their clients. They serve organisations of all sizes, ranging from small businesses to large enterprises across a wide range of industries.
With a strong presence in the HCM market, Ceridian has established itself as a trusted provider, leveraging technology to simplify HR processes, enhance employee engagement, and optimise overall workforce management for their clients.
Features of Ceridian
- Experienced – One of the highest rated HCM suites for 1000+ employee enterprise
- Highly rated – 4.5 Trustpilot score
- Care – They aim to improve the work lives of their customers, their employees, and their own teams at Ceridian every day and with everything they do.
- Award winning – Ceridian is proud to have earned a variety of distinguished awards for technology innovation and organisational excellence.
Methods of Payment accepted by Worldpay:
- Chip and PIN
- Contactless debit/credit
- Mobile wallets like Apple Pay, Google Pay and Samsung Pay
With Worldpay you can select a fixed-terminal or mobile card machine based on your business requirements. These devices can be utilised face-to-face and remotely for transactions and are compatible with Visa, Mastercard, China Union Pay, Diners Club International and Discover.
These devices also feature a range of security features, such as PCI DSS secure transactions and AVS Fraud detection, which can help reduce the risk of fraudulent activity on your business premises. Furthermore, they are HIPPA compliant, protecting customers’ sensitive personal information.
Payroll Services FAQS
The primary purpose of payroll services is to ensure that employees receive their salaries on time with the correct deductions and necessary withholdings. They are also responsible for remitting any of the withholdings or deductions of employees.
It is quite common for businesses to choose to use payroll software or company over manual processing, as it can help them work out payroll calculations and deductions quickly and generate accurate payslips.
Payroll services can calculate bonuses, expenses, holiday pay, etc, with minimum effort and administration from your end.
The main goal for any payroll service is to pay employees accurately, on time, and in line with UK tax regulations.
- Ensure security
- Get time back
- Get accurate, compliant payroll on time
- Save on costs
Hiring a payroll service helps you avoid delayed or incorrect payments by ensuring every employee receives the correct amount on time.
|Payroll Software||Payroll Services|
|Payroll software is often less expensive than working with a payroll service
It may be challenging to navigate unless you have accounting experience.
Be sure to research what is right for your company
|A payroll service is a third party company that allows you to outsource your payroll processing, which means you can focus your time on other things.|
Small to medium-sized businesses with fewer employees will benefit the most from payroll software, as it will be easier to manage.
In addition to ensuring payment is on time, you can use payroll software to calculate bonuses, expenses, holiday allowance, etc. You can use them to send returns to HMRC and print P45, P60 and other forms for employees. In addition, you can automate certain tasks, such as year-end reporting, and be comfortable knowing you can reduce the burden of compliance.
Payroll tax UK is collected through the Pay As You Earn (PAYE) system. In other words, your employer must figure out how much tax employees owe, deduct it from their salary, and send it to His Majesty’s Revenue and Customs (HMRC).
By outsourcing your payroll functions, you can ensure your data will be protected and remain within GDPR. Be sure to ask any questions you need clarification on to any potential payroll company you are looking to work with.
Outsourcing your payroll allows you to access efficient payroll services without employing a dedicated person or team to manage it for you. A lot of companies find that overall, outsourcing their payroll results in a cost-saving rather than a costly outlay.
Depending on the size of your company. A fully managed payroll service will cost around £4 – £6 per employee per month if you employ between 1-10 people. However, the bigger your company, the less you will pay. This can be reduced to about £3.50 per person if you have over 200 employees.
The below table is a rough estimate only across the whole of the UK; you can expect to pay more in cities.
|Service||Company size||Approximate Fee|
|Payroll services (incl. PAYE)||50 employees||£200 per month|
|100 employees||£500 per month|
|VAT returns||£0 to 100,000||£100|
HMRC is responsible for ensuring payroll companies adhere to up to day regulation; they have a responsibility to recognise and eliminate fraudulent payroll companies from the marketplace and restore parity
Yes, GDPR plays a big part in managing your payroll services. Payroll data is inherently personal, so you must ensure your business prioritises GDPR compliance when handling and processing it.
Employees will take satisfaction in knowing they are being paid correctly and on time, which can reduce employee turnover. Using these types of software can also save time on repetitive administrative tasks, freeing up time for more important tasks.
Businesses with little or no accounting teams, in particular, will greatly benefit from using a payroll service, as they can utilise the software’s convenience and expertise.
- You can only sometimes check it when you want to or add anything missing.
- You may not have instant access to your payroll if it has been outsourced
- You will have to submit confidential and sensitive staff information.
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