If you’re weighing up whether to hand payroll to a bureau or accountant, the honest range for payroll services cost in the UK is £4 to £12 per employee per month, or £3 to £15 per payslip, on top of a base monthly fee that typically sits between £25 and £60. That covers the core work: calculating pay, filing Real Time Information (RTI) to HMRC, and producing payslips. Pensions, year-end forms, and anything beyond the basics usually cost more, and that’s where most quotes start to diverge.
This guide breaks down what you’ll actually pay at each stage, what a typical accountant charges beyond the headline rate, and how outsourcing compares against running payroll yourself once you count your own time.
Payroll services cost: the headline numbers
Pricing in this market runs on two main models, and it’s worth knowing which one you’re being quoted before comparing providers.
Per-payslip pricing charges you for each payslip issued, typically £3 to £15, depending on service level and complexity. This suits businesses with variable headcount or seasonal staff, since you only pay for what you actually process that month.
Per-employee-per-month (PEPM) pricing charges a flat rate per employee regardless of how many pay runs happen, usually £4 to £12 for standard service, rising to £12 to £25 for a fully managed package that bundles in pension administration, P11D processing and dedicated support.
Almost every provider also charges a minimum monthly base fee, commonly £25 to £60, which matters more than the headline per-head rate if you’ve only got a handful of staff. A five-person business quoted £5 per employee sounds cheap until you realise the £40 base fee means you’re really paying £8 a head.
Payroll services pricing: what’s actually included
The floor, what almost every quote covers regardless of price, is: calculating gross-to-net pay, submitting FPS reports to HMRC under RTI, and issuing digital or printed payslips. That’s it. Everything past that point tends to be an add-on, and this is where a cheap-looking quote can quietly become expensive.
What’s usually extra
- Pension auto-enrolment administration. Basic PEPM pricing often covers the pension calculation itself, but active scheme management, uploading contribution files, tracking opt-outs, handling re-enrolment, frequently costs an additional £1.50 to £2.50 per enrolled employee per month, or a flat add-on of £15 to £40 monthly across the business.
- Year-end processing. P60s, P11Ds, and benefits-in-kind reporting are commonly billed separately, either as a standalone project fee of £50 to £150, or per form.
- CIS (Construction Industry Scheme) submissions, if you’re in construction and paying subcontractors, typically add £1 to £25 per subcontractor, depending on volume and complexity.
- Director-only payroll runs, common for small limited companies, tend to sit at £15 to £30 per run rather than being folded into standard PEPM pricing.
- Integration with accounting or HR software, where more advanced connections beyond a basic sync can cost a one-off £50 to £250, or an ongoing £5 to £20 a month.
Always ask a provider to itemise exactly what sits inside a quoted rate. A £4-per-employee bureau and a £12-per-employee bureau are rarely selling the same thing, and the gap is usually explained by what’s bundled versus billed separately.
How much do accountants charge for payroll?
Accountants running payroll as part of a wider bookkeeping relationship tend to price it similarly to standalone bureaus, with a base fee of £20 to £50 a month for microbusinesses and £4 to £10 per payslip on top, depending on complexity and region. The difference is usually less about the headline rate and more about bundling: if payroll sits alongside your existing bookkeeping or VAT return work, it’s often cheaper than buying it separately, since the accountant already holds your company data.
Sector-specific work adds cost regardless of who’s running it. Healthcare, construction, and taxi firms with unusual reporting needs often pay a premium over standard PAYE processing, simply because the compliance workflow is more involved.
Outsourced payroll cost UK: setup fees and getting started
Beyond the ongoing monthly cost, most providers charge a one-off setup fee of £30 to £150 to onboard your business, migrate existing employee data, and configure the first pay run correctly. Some smaller bureaus waive this if you sign an annual contract, so it’s worth asking directly rather than assuming it’s fixed.
Switching providers mid-year is generally straightforward; most businesses switch at the start of a new tax month to avoid partial-period reconciliation, though it can be done at other points if needed. Your incoming provider will typically handle the data transfer for you as part of onboarding.
Payroll bureau fees for pension submissions
Pension administration deserves its own mention, since it’s the single most commonly underquoted item in payroll pricing. For the 2026/27 tax year, employers must contribute at least 3% on qualifying earnings between £6,240 and £50,270 for every eligible employee, and that contribution is a cost of employing someone, entirely separate from whatever your payroll provider charges to administer it.
Administration itself, assessing staff, generating contribution files, uploading them to your pension scheme, tracking opt-outs and handling re-enrolment roughly every three years, typically costs an extra £1.50 to £2.50 per enrolled employee per month on top of core payroll fees, or a flat £15 to £40 across the business if your provider bundles it. Some fully managed packages fold this in already; many cheaper PEPM quotes don’t, so it’s one of the first things to clarify before signing.
Break-even: outsourced payroll vs software plus your own time
This is the calculation most business owners skip, and it’s the one that actually matters.
Running payroll yourself through software typically costs £1.50 to £8 per employee per month, depending on the platform, on top of any base subscription fee. That’s meaningfully cheaper on paper than outsourcing. What it doesn’t include is your own time, or whoever’s actually running the pay run each month.
A rough worked example for a five-employee business paid monthly:
- DIY through software: roughly £20 to £39 a month in subscription costs, plus an estimated 1 to 3 hours of admin time per pay run for calculations, checking pension uploads, and handling any starter or leaver paperwork.
- Outsourced bureau: roughly £45 to £90 a month all-in (base fee plus per-employee rate), with essentially no time cost beyond sending starter details and approving the final run.
If your own time is worth, say, £25 to £40 an hour, and payroll genuinely takes two hours a month to do properly, that’s £50 to £80 of time cost stacked on top of the software fee, pushing DIY payroll close to or past the outsourced price once you’re honest about the hours. The calculation tips further toward outsourcing once pension re-enrolment, P11D season, or a staff change complicates a normally simple run.
The break-even point most commonly cited in the market sits somewhere around 10 to 20 employees, where the fixed time cost of running payroll internally starts to exceed a bureau’s per-head rate, though this varies significantly depending on how much your own time is actually worth and how complex your payroll genuinely is.
FAQs
How much does it cost to outsource payroll in the UK?
Most UK businesses pay £4 to £12 per employee per month, or £3 to £15 per payslip, plus a base monthly fee of £25 to £60. Fully managed services that bundle pension administration and year-end work typically run £12 to £25 per employee.
How much do accountants charge for payroll services?
Accountants typically charge a base fee of £20 to £50 a month for small businesses, plus £4 to £10 per payslip, often cheaper when bundled with existing bookkeeping or VAT work. Pricing varies by region and how complex the payroll actually is.
Is pension auto-enrolment included in payroll service pricing?
Not always, and it’s one of the most commonly underquoted items. Basic per-employee pricing often covers the calculation itself, but active pension administration, uploads, opt-outs, and re-enrolment tracking frequently costs an extra £1.50 to £2.50 per enrolled employee per month on top.
What does a P11D filing cost as part of payroll services?
P11D forms for benefits in kind are commonly billed separately from standard monthly payroll fees, typically £20 to £40 per form, or bundled into a year-end processing charge of £50 to £150 across the business. Always confirm whether this is included before comparing quotes.
Are there setup fees for outsourced payroll?
Most providers charge a one-off setup fee of £30 to £150 to onboard your business and migrate existing employee data. Some waive this for annual contracts, so it’s worth asking directly rather than assuming the fee is fixed.
Is it cheaper to run payroll myself or outsource it?
For a very small team with simple pay, software alone is usually cheaper on paper at £1.50 to £8 per employee per month. Once you factor in the time spent running it properly each month, outsourcing often becomes more cost-effective as headcount grows past roughly 10 to 20 employees, though this depends heavily on what your own time is worth.
Does payroll outsourcing cost more for weekly pay compared to monthly?
Yes, weekly payroll means 52 pay runs a year instead of 12, and most providers charge per run or per payslip, so the total cost multiplies accordingly. If most of your staff are monthly with only a few weekly, ask whether a mixed frequency arrangement keeps costs down.
What’s typically not included in a basic payroll service quote?
Pension scheme administration beyond the basic calculation, P11D and year-end reporting, CIS submissions for subcontractors, and director-only payroll runs are all commonly billed as separate add-ons. Always ask for an itemised breakdown rather than comparing headline rates alone.
