Should you invest in HR payroll software? In fact, the search that led you to this page was probably along the lines of ‘best payroll software for small businesses in the UK’.

In this article, we will cover what to look for in a payroll solution. After reading, you’ll be in a better position to evaluate what are the best payroll providers for a small business in the UK . This should help you find the best fit for your business. Let’s get started.

What is payroll software?

Payroll software is a tool designed to simplify the process of paying employees. It can calculate wages, taxes, and deductions, which saves time and money while reducing errors. Payroll software can also generate reports, help with tax compliance, and provide self-service options for employees.

By using payroll software, SMBs can simplify their payment processes and ensure their workers are paid accurately and on time. It's an essential investment that can save businesses time, money and prevent costly mistakes.

Read our guide on What is Payroll Software for more.

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What features should the best payroll software for small businesses offer?

Many factors can contribute to determining the best payroll software in the UK. As an SMB, a key objective is to ensure that your payroll is managed accurately and effectively. Selecting the right HR payroll software can help you achieve this, but it is important to evaluate the features that are most important to your business.

In this section, we’ll discuss six features that the best payroll software for small businesses should offer. This will help you select a solution that meets your specific needs and helps your business thrive.

Team Looking At The Best Payroll Software Features For Smbs

1. Allows you to complete essential payroll activities

Functionality is key when looking for payroll companies for small businesses. The best payroll software should offer a range of features that make it easy to complete essential payroll activities.  

These might include:  

  • Producing payslips
  • Recording and storing employee details
  • Calculating pay and relevant deductions
  • Calculating statutory pay
  • Producing payment reports
  • Generating year-end reports 

These features combined will help you streamline and manage your payroll to ensure your employees are paid on time and accurately.

2. Use HMRC-approved payroll software

Payroll software must follow government guidelines and requirements set by HMRC to ensure accurate and lawful processing of employee wages and taxes. . By failing  to report to HM Revenue and Customs (HMRC) can result in legal action, so it is essential to choose  HMRC-approved payroll software to prevent any issues.

It’s important to note that for small businesses seeking reliable and cost-effective solutions, the free HMRC payroll software can be very useful.

3. Real-time reporting (RTI) compliant

A good payroll system for small businesses  will offer real-time reporting (RTI) functionality. This means that pay as you earn (PAYE) submissions can be made more efficiently, and HMRC can receive information instantly. RTI compliance ensures that your business is up to date with the latest legislation and requirements, and it helps to reduce the risk of errors or late submissions.

4. Offers automation

Automation is a key feature when selecting a payroll for a small business. This allows HR teams and business owners to automate time-consuming processes, such as calculating pay and deductions. By automating these tasks, you can save significant amounts of time and resources, and reduce the risk of errors or inaccuracies.

5. Offers an advance payment solution

Paying advances can be a messy and difficult process, but the best payroll software providers offer a solution to this issue. For example, EasyPay allows for the seamless payment of advances, ensuring that your employees are paid accurately and on time. With this functionality, you can simplify your payroll processes and improve your business operations

6. Can be easily integrated

Integrating your payroll software with your existing software is essential for ensuring the safe transfer of sensitive information. This includes integration with overall HR software and absence or time and attendance software. By integrating your software solutions, you can ensure that all relevant data is transferred easily and quickly, allowing you to calculate the relevant pay accurately and efficiently.

Choose a payroll software provider that offers easy integration with your existing software to make the most of this feature.

What is the best free payroll software for small businesses in the UK?

If you have a very small business with fewer than 10 employees, then Basic PAYE Tools offered by HMRC may be the best payroll software for you. HMRC’s free payroll software meets the basic requirements for payroll submission.

However, it cannot be used to produce payslips. As it is extremely basic, it may not be suitable for larger businesses.  

If you require a more comprehensive payroll solution, it is best to budget for payroll software or consider payroll outsourcing services with a trusted third-party provider.

Useful links: 

Person Searching For Free Payroll Software For Small Businesses UK

How to choose the best payroll software for your small to medium business

In this section, we'll help you identify the best payroll software for your business needs. We understand that with so many options available in the market, it can be overwhelming to choose payroll for your business.

Here are some factors that you should consider before making a decision:

1. Set out your business requirements

First, let's talk about setting out your business requirements. Your business requirements could include things that are non-negotiable or specific features that are desirable for your business.

Other factors to consider when finding  payroll solutions for small businesses include:

  • The size of the organisation  
  • Payroll budget 
  • Number of employees  
  • Number of seasonal/temporary employees 
  • Whether the software needs to integrate with other software
  • How often payroll is conducted
  • Whether the organisation is remote, hybrid or office-based

2. Is the software secure?

Next, consider whether the software is secure. To do this, you should ask prospective software providers what security measures are in place.

Examples of security measures within the software include:

  • Two-factor authentication and encryption of sensitive data  
  • Regular security audits
  • Employee training on data protection

3. Is the software accessible?

In addition to security, accessibility is another important factor. With hybrid work environments becoming the norm, the payroll software must be accessible via an HR app or cloud-based system. Employees should be able to view their payslips, even when they're not at work.

4. Does the software provider offer support?

Support is another important consideration. Think about the level of expertise in your business and whether you need training and support. A great payroll software provider should offer comprehensive support, including onboarding assistance, ongoing support, and training resources.

5. Try before you buy

Finally, it's important to try the software before purchasing it. The best payroll software providers offer a free trial or demo to help SMBs understand whether the software can give them what they need. Taking the software for a test drive can help you make an informed decision and ensure the software meets your specific business needs.

6. Set your budget

Your budget can easily determine the different payroll software providers your business can compare. The cost of payroll software can vary greatly, and ensuring you fully understand your requirements, and your chosen pricing model is crucial to getting the most for your money.

Next steps

Choosing the best payroll software for your small business is not an easy task. There are several factors to consider, like your business requirements, accessibility, security and support. You should take the time to evaluate your options and find a provider that meets your specific needs.

If you are in the market for payroll software, why not try a free trial of Access PeopleHR? We offer a range of features designed to save time and ensure compliance and security. And if you have any further questions on what is the best payroll software for small businesses, don’t hesitate to speak to one of our experts. 

Get started now
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Rich Newsome
By Rich Newsome Digital Content Writer

Rich is a content writer at Access PeopleHR and has a wealth of experience within the tech space, including HR software. Passionate about providing website visitors with informative and easy-to-understand content, Rich is committed to helping SMBs find the best solutions for their needs. With a flair for writing, Rich's content engages and educates readers, guiding them towards informed decisions.