UK payroll software costs
From free HMRC tools to £90-a-year desktop stalwarts and per-employee cloud platforms: what UK payroll software actually costs in 2026/27, and which pricing model fits your business.
The four pricing models
- Free: HMRC’s Basic PAYE Tools handles up to 9 employees but offers no payslip design, pension integration or support. Employment Hero offers a free payroll tier including RTI, auto-enrolment and even CIS.
- Flat annual licence (desktop): Moneysoft Payroll Manager is the benchmark at roughly £90 to £95 a year plus VAT for up to 20 employees, with no per-employee charges – about 40p per employee per month at full capacity. The trade-off: Windows-only, no cloud access, no employee self-service. Note that BrightPay, the other desktop favourite, is moving cloud-only from 2026/27.
- Cloud subscription (standalone): Sage Payroll starts around £20 a month for up to 10 employees; Staffology (IRIS) sits in a similar bracket. You get anywhere-access, automatic legislative updates and employee self-service portals.
- Accounting platform add-on: QuickBooks Payroll runs about £5 a month plus £1.30 per employee; Xero Payroll about £1.50 per employee on top of a Xero accounting plan. Cheapest per head – but only if you already pay for the parent platform.
What a 10-person business pays per year
| Product | Model | Approx. annual cost |
|---|---|---|
| Employment Hero (free tier) | Cloud | £0 |
| Moneysoft Payroll Manager | Desktop licence | ~£90 |
| QuickBooks Payroll (add-on) | Cloud add-on | ~£170 |
| Sage Payroll | Cloud standalone | ~£240 |
| Xero Payroll (excl. accounting plan) | Cloud add-on | ~£180 |
| Staffology by IRIS | Cloud standalone | ~£470 |
| PayFit | Cloud (automation/HR) | ~£900+ |
Whatever you choose must be HMRC-recognised for RTI – every product above is on the GOV.UK approved list. Prices move; treat these as the verified going rates at the time of writing and check current tariffs before committing.
The hidden cost: your time
Software fees are the small line. Each pay run still needs someone to enter changes, check tax codes, chase timesheets, handle statutory pay and answer payslip queries – typically 2 to 5 hours a month for a 10-person payroll, more in weekly-paid or high-turnover businesses. That is the real comparison against outsourcing at £4.00 – £10.00 per employee per month. The payroll software cost calculator puts both options side by side for your headcount.