Best HMRC-Compliant Payroll Software for UK Small Businesses
HMRC will not tell you which payroll product is best, but it does publish a list of software it recognises. This guide explains what that recognition means, which free options exist for employers with fewer than 10 staff, how paid plans are priced, and how to match a product to your obligations.
Sumcraft Editorial Team
Sumcraft
How to read this guide. Sumcraft does not rank or endorse payroll products. The products named below are examples taken from HMRC's recognised list and from providers' own pricing pages, checked on 15 October 2026. Prices change often; confirm them with the provider before you buy. This is general information, not tax advice.
What 'HMRC-compliant' actually means
There is no such thing as HMRC-approved payroll software. What HMRC does is publish a list of payroll software that it recognises. Recognition means the product has been tested to send Real Time Information (RTI) submissions to HMRC correctly. It does not mean HMRC has reviewed the product's accuracy, usability or customer service. HMRC states plainly that it 'cannot recommend one product or service over another'.
So the starting point for any UK employer is simple: choose a product that appears on HMRC's list, then compare products on the things HMRC does not test.
Your payroll obligations, in one table
Before comparing software, be clear about what it must help you do. These are the core PAYE and pension duties for a UK employer, as set out on GOV.UK.
| Obligation | Deadline or rule | Source |
|---|---|---|
| Full Payment Submission (FPS) | On or before each payday | GOV.UK: running payroll |
| Employer Payment Summary (EPS) | By the 19th of the following tax month, when you need to report reclaims or no-pay periods | GOV.UK: EPS |
| Paying HMRC | Monthly, or quarterly if you expect to pay less than £1,500 a month | GOV.UK: pay employers' PAYE |
| Payslips | On or before payday | GOV.UK: payslips |
| Pension auto-enrolment | Duties start on your first employee's first day; enrol eligible staff within six weeks | The Pensions Regulator |
Under auto-enrolment, you must put workers into a workplace pension if they are aged 22 to State Pension age and earn more than £10,000 a year. Good payroll software assesses each worker every pay period and tells you who to enrol.
2026/27 rates your software must handle
Any recognised product should apply these automatically, but they are useful for checking a first payslip by hand. Our salary calculator uses the same figures.
| Rate or threshold (2026/27) | Value |
|---|---|
| Personal Allowance | £12,570 |
| Lower Earnings Limit (LEL) | £6,708 a year |
| Primary Threshold (employee NICs) | £12,570 a year |
| Secondary Threshold (employer NICs) | £5,000 a year |
| Employer Class 1 NICs | 15% above the Secondary Threshold |
| Employment Allowance | Up to £10,500 a year, if eligible |
See GOV.UK's rates and thresholds for employers for the full list, including student loan and postgraduate loan thresholds. If your staff repay student loans, our student loan repayment estimator shows how deductions work.
Option 1: Free payroll software (fewer than 10 employees)
HMRC's list includes free products for employers with fewer than 10 employees. As of 15 October 2026, these include:
- [Basic PAYE Tools](https://www.gov.uk/basic-paye-tools), HMRC's own desktop software. It runs on Windows 10 and 11, macOS 15 and 26, and Ubuntu 24.04 and 25.10. It calculates PAYE and NICs and sends RTI submissions, but it does not produce payslips or handle pensions.
- Primo Payroll (Accentra)
- Enrolpay Small Payroll
- RTI Lite (Hartigan Software Design)
- 1 A Simple Payroll
- Stansoft (for Linux)
Free products are usually the right choice for a director-only company or a business with one or two staff on fixed pay. The trade-off is fewer automations: you may need to produce payslips separately, run pension contributions through your provider's own portal, and keep backups yourself.
Option 2: Paid cloud and desktop payroll
Paid products add automatic pension assessment and submissions, employee self-service portals, payslip emails, integration with accounting software and phone support. Here are published prices for several products on HMRC's list. All prices exclude VAT and were checked on 15 October 2026.
| Product | Published pricing (ex VAT, checked 15 Oct 2026) | Notes |
|---|---|---|
| Xero | Ignite plan £18/month plus payroll at £1.50 per person; Grow £39 (1 person included); Comprehensive £55 (5); Ultimate £70 (10); £1 per additional person | Payroll bundled with accounting |
| Sage Payroll | Essentials £12, Standard £23, Premium £34 a month (prices quoted for 5 employees) | Standalone payroll |
| Moneysoft Payroll Manager | £95, £190 or £285 a year, depending on licence size | Desktop software, annual licence |
| IRIS Staffology | From £43 a month for 1 to 20 payslips | Cloud payroll |
| BrightPay | No fixed price list published. Cloud billing is based on your highest employer and employee count in each billing period, with monthly or annual plans; get a quote from BrightPay's pricing page | Windows version discontinued after 5 April 2026; now cloud only |
| QuickBooks | Payroll is not included in any QuickBooks plan; it is a paid add-on to Simple Start, Essentials, Plus or Advanced. Live prices were not displayed on Intuit's UK pricing page on the check date | Payroll bundled with accounting |
Where a provider does not publish a fixed price, we say so rather than quote an estimate. Ask for a written quote based on your employee count before you compare.
How to choose: seven questions to ask
With the compliance baseline met, the right product depends on how your business works. Ask each provider these questions and compare the answers in writing.
- How many employees, and how often do you pay? Check how pricing scales as you hire, and whether weekly and monthly pay frequencies cost extra.
- Does it handle auto-enrolment end to end? Look for automatic assessment, letters to staff and direct submissions to your pension scheme.
- Does it link to your accounting software? Posting payroll journals automatically saves time and supports Making Tax Digital record-keeping.
- Can staff see their own payslips and P60s online? Self-service saves time once you have more than a handful of employees.
- Does it support the extras you need? Directors' National Insurance, statutory sick and parental pay, salary sacrifice, benefits in kind and student loan deductions vary between products.
- What support is included? Find out whether you get phone support or email only, and whether support is available during the busy year-end weeks.
- How do you export your data if you leave? You must keep payroll records for at least three years from the end of the tax year they relate to, so make sure you can get your history out.
Common mistakes when switching payroll software
- Changing mid-year without carrying over year-to-date figures. Enter the correct totals for pay, tax and NICs so far this tax year, or payslips and RTI submissions will be wrong.
- Sending duplicate FPS submissions from the old and new systems in the same period.
- Forgetting the pension provider. Update your scheme with the new software connection before the first pay run.
- Ignoring director NICs. Directors are assessed on an annual earnings period. If you pay yourself through payroll, our dividend vs salary calculator shows the trade-offs.
Bottom line
Start with HMRC's recognised list, map out your real obligations, then decide whether a free product covers them. If you employ fewer than 10 people on simple pay, free software often does. If you need pensions, integrations and self-service, the published prices above give you a starting point for comparison, not a recommendation. Whatever you choose, run your first payroll in parallel with your old method and check the results against GOV.UK's rates before you rely on it.