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Part of How to switch payroll software UK without disrupting pay runs

How to switch payroll software UK without disrupting pay runs

Switching payroll software mid-year means planning RTI opening balances, P45 and P60 continuity, employee data transfer and pension re-enrolment.

Editorial Desk · · 4 min read

What to take away

  • Move at the start of a pay period, never mid-period, so one system owns each full run.
  • Check RTI year-to-date balances, P45 and P60 continuity before the first live submission.
  • Treat the data move as a change of processor, with your organisation still the controller.
  • Confirm pension contributions and any re-enrolment dates survive the switch.
  • Run one dummy period and reconcile the first three live runs.

Time the cutover to a pay period boundary

Mid-year switches fail for one dull reason: two systems each hold part of a tax year. HMRC's Real Time Information service expects one continuous record of pay and deductions for each employee. Split that record and your year-to-date totals stop reconciling.

Cutover at a pay period boundary

  1. Old system
    final payroll run and FPS submitted
  2. Cutover day
    first day of next pay period
  3. Old system
    frozen as read-only
  4. New system
    owns every later submission

Pick the first day of a pay period. Run the final payroll in the old software and submit it. Then freeze that system as read-only. The new system starts with the next period and owns every later submission.

If a pay period boundary is months away, run both systems in parallel for one period instead. The payroll workflow from opening the period to reconciling the outputs shows where a second system tends to double-count.

Check RTI, P45 and P60 continuity

Your first Full Payment Submission in the new software must carry correct year-to-date figures for every employee. That covers taxable pay and tax deducted, along with student loan deductions.

Opening balances to verify

  • Taxable pay year-to-date
  • Tax deducted year-to-date
  • Student loan deductions
  • Raw data extract, not PDF
  • P45 leaver totals
  • P60 year-end totals

Ask the outgoing supplier for a raw data extract, not a PDF report. You need the fields plus the cumulative totals HMRC already holds for each person.

P45s for leavers and P60s at year end both depend on those totals. Get the opening balances wrong and you correct them with an amended FPS, which is slower than a clean handover.

Move employee data as a controller

Switching supplier changes the processor, not the purpose, so your organisation remains the controller. The ICO's guide to the UK GDPR sets out the contract terms you need with a new processor and the duties that stay with you.

Export only the fields the new system needs. Agree a deletion date for the old supplier's copy in writing. Payroll files carry bank details, National Insurance numbers and sometimes health information, so a spreadsheet sent to a project inbox is the wrong route.

Not everyone you pay belongs on payroll. The ONS employment and employee types release separates employees from self-employed people and other categories, which helps you decide whose records should move.

Keep pension duties on schedule

Auto enrolment duties continue through a migration. Contribution percentages, qualifying earnings and postponement dates all have to survive intact. The Pensions Act 2008 sets the duties, and re-enrolment runs on a three-year cycle from your duties start date.

Check the assessment settings in the new software against your duties start date and your next re-enrolment window. Where the provider's approach is unclear, compare how auto enrolment payroll options handle postponement and cyclical re-enrolment.

Re-enrolment can be triggered on any date within a six-month window, so avoid the cutover month if you can. If the window has to fall during the switch, run it manually and keep the evidence.

A payroll migration checklist

  • Choose a cutover date at a pay period boundary and confirm it in writing with both suppliers.
  • Agree the exit extractfields, format, delivery date and any charge.
  • Load opening year-to-date balances per employee into the new system.
  • Run one dummy period, check the FPS calculation and test the pension file.
  • Submit the first live FPS and confirm HMRC acceptance before closing access to the old system.
  • Reconcile the first three live runs line by line, then set the old system to read-only.

Common questions

When is the best time to switch payroll software?

Between pay periods, ideally at the start of a tax year. A mid-year switch works if the opening balances are right, but avoid moving in the middle of a period you have already part-processed.

Do I need to tell HMRC that I have changed payroll software?

No. You keep the same PAYE reference and employer registration, and the change appears through your FPS submissions. Tell HMRC only if your payroll contact or scheme details also change.

What happens to employees' P60s after a mid-year switch?

The new software produces the P60 from the year-to-date totals it holds, so accuracy depends on the balances you loaded at cutover. Keep the old supplier's records until the retention period ends.

Can I run two payroll systems at once during the change?

Yes, for one pay period as a parallel run. Going longer doubles the work and creates two sets of numbers, so agree which system is authoritative before the first live submission.

Filed underpayroll softwarepayroll migrationrtiauto enrolmentuk payroll

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