Payroll Services are the systems and teams that make sure your staff get paid accurately, on time, and in compliance with UK rules. This article explains provider options, compliance essentials, costs, and a clear checklist to choose the right solution for your business in London and across the UK.

TL;DR

• Use a small cloud payroll system if you run a micro business; outsource if you lack time or need multi-country payroll. Ensure RTI submissions and auto-enrolment are handled. Compare fixed fees, data access, and integrations before you sign.

What are Payroll Services?

Payroll services handle salary calculation, tax and NI deductions, pensions, payslips and HMRC reporting. A one-sentence definition: Payroll services UK automate or manage employee pay runs and statutory compliance for employers. Examples include in-house software like Sage Payroll and bureau services that make Real Time Information submissions to HMRC. Good payroll services reduce errors and compliance risk.

Software vs outsourced payroll: how to decide

Choose software for control and outsourcing for time savings and complexity management. Software like Sage Payroll, BrightPay or Xero Payroll suits small businesses that want a hands-on approach. Free payroll software UK options exist, but they often lack support, integrations and advanced pension features.

Outsourced payroll providers UK offer managed runs, year-end filings and support for multiple pay cycles. Use software when you have simple payroll and internal capacity. Pick outsourcing when you have limited time, complex pay rules or need a payroll bureau's compliance guarantee.

Compliance essentials for UK payroll

Compliance starts with Real Time Information (RTI) and pension auto-enrolment. RTI means employers submit pay and tax details to HMRC each pay run; see official guidance at gov.uk RTI. Auto-enrolment rules require preparing, staging and running contributions for eligible staff; details at gov.uk workplace pensions.

Key items to track: statutory sick pay (sick pay UK), salary sacrifice pension arrangements and National Insurance calculations. For example, salary sacrifice affects both payroll and pension contributions and must be coded correctly. Missing RTI or auto-enrolment deadlines can trigger penalties.

Costs and pricing: what to expect

Payroll costs vary by complexity, frequency and headcount. Typical pricing bands: small businesses pay from £10–£30 per month for simple cloud software; outsourced payroll starts around £2–£8 per employee per month for basic runs, with fixed-fee packages for small companies. Bureaus may charge setup, year-end and payslip fees.

Watch for hidden costs: integration fees, ad-hoc changes, or pension re-enrolment support. Request a transparent fee schedule and sample contract before you commit. If you search for "payroll services near me" include cost, support hours and data access in your shortlist.

How to choose the right payroll provider

Start with this quick checklist to vet suppliers. Ask for RTI experience, pension auto-enrolment handling, data security and integration with your accounting system.

• Business size fit: micro, SME or enterprise.

• Integration: does it sync with Xero, QuickBooks or Sage?

• Support: phone, email and out-of-hours availability.

• Pricing clarity: setup, monthly, per‑employee and year‑end charges.

• Compliance: RTI submissions and pension re-enrolment expertise.

Also compare a list of payroll systems UK and ask for references from similar firms. For outsourced work, look for managed services that include audits and payroll analytics.

Why work with Interface Accountants for payroll

Interface Accountants combines payroll expertise with cloud accounting and a fixed-fee model. They handle RTI, auto-enrolment and offer cloud access so you can review payslips anytime. See their payroll services here: Interface Accountants payroll services.

The firm serves London and nearby towns and offers instant quotes and unlimited support on select plans. If you prefer a local partner that covers bookkeeping, VAT and payroll, this is a practical option for SMEs and contractors.

Summary

Payroll Services in the UK range from free or low-cost software to full outsourcing by specialist bureaus. Choose software for simple needs and outsourcing for complexity or limited internal capacity. Focus on RTI, pension auto-enrolment and clear pricing when you evaluate providers.

FAQs

What is RTI and why does it matter?

RTI is HMRC's system for reporting employee pay details each pay period; it matters because submitting on time avoids penalties and ensures correct tax records.

How does salary sacrifice affect payroll?

Salary sacrifice reduces gross pay in exchange for benefits and changes tax and National Insurance calculations, so payroll must reflect the arrangement precisely.

Can I use free payroll software in the UK?

Yes, free options exist but they often lack support, advanced pension features and integrations needed as your business grows.

How is statutory sick pay calculated?

Statutory Sick Pay depends on eligibility, qualifying days and average weekly earnings; employers calculate it based on HMRC rules and normal pay cycles.

How much does payroll outsourcing cost in the UK?

Expect basic outsourced runs from about £2–£8 per employee per month; fixed-fee packages for small firms are common, but request a full fee breakdown.

Where can I find help with a GOV.UK P800 refund?

HMRC issues a P800 when you've overpaid tax; check GOV.UK and contact HMRC for refunds or adjustments.

Need tailored advice? Contact a payroll specialist to compare a cloud payroll setup versus outsourcing for your headcount, pay complexity and compliance needs.