How to choose the right payroll software for your business

Before you start researching, establish a clear idea of your business needs. These include the number of employees you need to pay, how many administrators will be using the payroll software, your budget, ease of use, and ongoing support.​

How many employees do you need to do the payroll for? Are they full-time employees, seasonal, or temporary employees? Are they in the same country, or are they based in different countries?​

Payroll software is often priced based on the number of employees, so this one is key.​

Consider the number of users who need to use the software. If you have a small team, you may need fewer features. Larger teams could warrant a platform that offers advanced features such as automatic data capture and data import.​

There are many questions to ask yourself when conducting payroll. What is the payroll cycle? How often do you pay your full-time, part-time employees, and contractors? Do you have employees whose payroll cycles are different from others? Are your employees getting paid salaries or by the hour? Do your employees get a set number of holidays every year, or is it based on the percentage of hours they worked? These need to be taken into consideration when choosing payroll software that suits your needs.​

How much have you budgeted? Is the pricing structure clear and transparent on the website? The most common pricing structure is per employee per month. This means you need to calculate the monthly total cost and compare this number with your budgeted costs to get your total. Remember to account for more seats if your company is in a growth phase.​

Apart from employment law, are there any legislative requirements to consider when processing your payroll? Does your company have enterprise agreements or award rates? Does the software get updated as the new regulations pass? For example, if a public holiday has been added or the tax rates have changed, the payroll provider will ideally update them as they go into effect.​

Do you want your software linked to your accounting system? Do you need to import information from spreadsheets (such as timesheets) or other platforms? Integrating with your current accounting system and other software helps you streamline and manage information, ultimately reducing time, resources, and costs for business owners. ​

You will be able to view your payroll data clearly using the reporting and analysis features. Using the right level of reporting, you'll be able to see and track important metrics such as employee salaries, holidays, taxes (e.g., PAYE, superannuation) and tax deductions. ​

Your payroll data contains personal information of your employees (e.g., their banking details), as well as information about your business and access to your bank accounts. Choosing a provider that offers top-tier security is essential in order to protect data from potential breaches.​

Opt-in for a cloud-based solution (e.g., Xero Payroll) if you need access from multiple locations. This offers several benefits, including:​

You will need to submit a Full Payment Submission (FPS) to HM Revenue and Customs (HMRC). This informs them of payments to your employees, as well as any payment deductions you’ve made each month.​

An FPS contains employer registration details, employee details and employment details. This needs to be sent on, or before, your employee’s payday - regardless of whether you pay HMRC quarterly or monthly.​

Read more on Full Payment Submissions here.​

All employers must provide a workplace pension scheme. This is called ‘automatic enrolment’.​

Workers must be enrolled if all of the following apply: ​

Find yourself a software which will link with your pension provider to assess which workers need enrolling.​

We’ve rounded up some of the best payroll software solutions in the UK: ​

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We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.​