Do I need payroll software?

When setting up and running a small business, learning how to do payroll is often the most stressful part for employers. Ensuring all calculations are correct and submitting information to HMRC so staff get paid on payday can consume valuable time and resources. That’s why many small business owners are turning to payroll software to streamline the process, solve common issues, and free up their time to focus on growing their business.

What is payroll software?

Payroll software is an online platform that automates the process of calculating employees’ pay, filing tax returns, and paying staff within a business. It’s a modern alternative to the manual payroll process and is increasingly popular among small businesses that lack an in-house accounting team.

Features of payroll software

Payroll software features vary, but good payroll software should be able to:

• Connect to HMRC automatically to sync any changes in employee hours, salaries, tax codes, etc.
• Calculate the correct wage or salary for each staff member
• Deduct contributions for National Insurance, Income Tax, etc.
• Auto-enroll employees in a pension scheme
• Send payroll data to HMRC each pay period
• Create a payroll journal for a full payroll report
• Generate and distribute employee payslips.

The more functions your payroll software includes, the easier it will be to manage payroll as an employer.

Do I need payroll software?

This is a common question for employers. While payroll can be done manually or outsourced to an accountant, payroll software offers significant advantages, particularly for small business owners. Here are some reasons why investing in payroll software can make a difference.

Payroll software benefits

Reduced errors

With payroll software handling calculations, the likelihood of mistakes on employee payslips is greatly reduced. Fewer errors mean happier staff, fewer complaints, and a more positive and trusting workplace culture.

Time-saving

Payroll software can complete calculations in seconds, saving you hours compared to manual processing. This leaves you with more time to focus on essential tasks, like conducting employee reviews or planning upcoming projects.

Example: For a business with 10 employees, payroll software could save up to 5 hours per pay period – time you can reinvest in your business.

Cost-effective

Outsourcing payroll can be expensive, and errors with manual calculations can result in costly fines from HMRC. Payroll software offers flexible payment plans, making it an affordable solution for small businesses.

Secure system

Data protection regulations now make it impractical to store sensitive employee information in a physical format. Payroll software securely stores data in the cloud, with permissions to control who can access it.

Stay compliant

Every business must report payments and deductions to HMRC by payday. Payroll software can automatically notify you of upcoming deadlines and send reminders to ensure compliance, reducing the risk of late filing penalties.

Payroll software costs

For small business owners, pricing is often the key factor when deciding on payroll software. Three main pricing structures are available:

• A single upfront fee
• A fixed monthly fee
• A fee per employee, per month

The third option is popular with small and medium-sized businesses, as it allows costs to scale as the company grows.

Payroll software for small businesses

Our payroll software is designed with UK small business needs in mind. It seamlessly integrates with our HR software, automatically updating any changes in pay and sending them directly to HMRC. Calculations and deductions are performed accurately, and payslips are stored securely in employee files for easy access. All you need to do is authorize payment!