Costs and pricing
Part of Payroll software prices and budget assumptions in England
Payroll software cost guide England: annual prices
Payroll software cost guide England: published prices for named products and a 12-employee price-only comparison, plus extra-cost notes.
This payroll software cost guide England employers can use starts with a caveat: there is no dependable average payroll software cost for every England employer. Public prices use different employee bands, products, billing periods and bundles. For the fixed 12-employee scenario below, the published annual software cost ranges from £0 to about £408 plus VAT.
This guide fixes one employer scenario and names live supplier pages with published prices. Check each figure again on your decision date.
What to take away
- Public price pages list different employee bands, products, billing periods and bundles.
- Fixed scenarioone limited company based in England with one PAYE scheme. It has 12 monthly-paid employees, two payroll users, one pension and Xero accounting integration. Payroll runs internally from April 2026.
- Annualised published prices with a stated 12-employee figure range from £0 to about £408 plus VAT; this price-only comparison does not confirm that every product meets the scenario's requirements.
- Add implementation and internal work, because HMRC warns that mishandled migration can create duplicate records or an incorrect PAYE bill.
- Keep net pay, PAYE remittances and pension contributions outside the software total.
Fixed employer scenario
Example Ltd is an England-based limited company with one PAYE scheme, 12 monthly-paid employees and two staff running payroll internally. It offers one workplace pension.
Fixed Employer Scenario
- 12monthly-paid employees
- 2internal payroll users
- 1PAYE scheme
- 1workplace pension
It wants email payslips, FPS and EPS submissions, and Xero integration. The example assumes a migration from spreadsheets on 6 April 2026. No CIS, benefits in kind or bureau service, and all prices are ex VAT unless stated.
Published price claims and annualised costs
Figures are based on published pricing claims for 12 employees and were checked on 9 May 2026. They are not a verified shortlist: confirm with each supplier whether its product supports email payslips, a pension, Xero integration, two payroll users and FPS/EPS submissions.
- HMRC Basic PAYE Tools: free. It calculates PAYE and National Insurance and sends RTI. Suits very small employers. Annual software cost for 12 employees: £0. As checked: 9 May 2026.
- BrightPaypublic pricing lists free for up to 3 employees, then paid annual bands. For 12 employees, the 11 to 25 employee band has been listed around £149 plus VAT per year. Suits small and medium employers wanting desktop or cloud payroll. As checked: 9 May 2026.
- Sage Payrollpublic pricing lists employee-band plans. The 11 to 25 employee band has been listed at £25 per month plus VAT. For 12 employees, that is £300 plus VAT per year. As checked: 9 May 2026.
- QuickBooks Online Payrollpublic pricing lists a base fee plus per-employee charge. It has been listed from £7 per month plus £1 per employee per month. For 12 employees, that is £19 per month or £228 plus VAT per year. As checked: 9 May 2026.
- Xero Payrollpublic pricing lists Starter at £15 per month, Standard at £34 and Premium at £52. UK payroll is included on paid plans. For 12 employees on Standard, software cost is £408 plus VAT per year. As checked: 9 May 2026.
- FreeAgentpublic pricing lists a Limited Company plan at £19 per month, or £228 per year plus VAT. Payroll is included for limited companies. For 12 employees, software cost is £228 plus VAT per year. As checked: 9 May 2026.
- The Payroll Sitepublic pricing lists employee bands. The 11 to 20 employee band has been listed at £11.50 per month plus VAT. For 12 employees, that is £138 plus VAT per year. As checked: 9 May 2026.
- Moneysoft Payroll Managerthe figure given here is a desktop annual licence from £60 plus VAT for small employers. Higher employee bands cost more, but no 12-employee annual price is stated. It is not included in the fixed-scenario price range. Check the current band before comparing. As checked: 9 May 2026.
Normalise the Annual Charge
- Add base subscription, employees, companies, users
- Add extra runs, modules, document delivery, pension connections
- Add payment fees and support tiers
- State how joiners and leavers affect billed headcount
- Show introductory discounts separately
- Confirm renewal, minimum term, cancellation, price-change rules
Add implementation and internal work
Budget for data preparation, setup, migration and parallel payrolls. Add reconciliation, pension testing, training and security. Include operator and approver time at realistic loaded rates. Add contingency against named risks rather than a percentage with no rationale.
Typical implementation and internal work for this scenario often runs from a few hundred pounds for self-setup to a few thousand pounds for a consultant-led migration. That range depends on data quality, parallel runs, training and the loaded rate of the people doing the work.
Implementation and Internal Work
- Data preparation and setup
- Migration and parallel payrolls
- Reconciliation and pension testing
- Training and security
- Operator and approver time at loaded rates
- Contingency against named risks
Mishandled payroll IDs during migration can create duplicate records or an incorrect PAYE bill. That makes validation and parallel work real project costs, not optional extras.
Use current first-party records
HMRC's recognised software list can identify products able to report PAYE online. It does not publish a standard price or recommend a supplier.
Preserve First-Party Records
- Provider's live price page
- Product edition and date
- Currency and VAT treatment
- Promotion details
- Written proposal for quote-only pricing
For each shortlisted product, preserve the provider's live price page, product edition and date. Also preserve currency, VAT treatment and promotion. Quote-only pricing is unknown until the supplier provides a written proposal. Do not record it as zero or estimate it from another customer.
Low, Expected and High Cases
Low
- Employee movement
- Fewer joiners
- Implementation effort
- Smooth migration
- Support
- Basic tier
- Additional runs
- None
Expected
- Employee movement
- Stable headcount
- Implementation effort
- Typical setup
- Support
- Standard tier
- Additional runs
- Some
High
- Employee movement
- More joiners
- Implementation effort
- Complex migration
- Support
- Premium tier
- Additional runs
- Many
Keep one rule for every figure: record the source, date checked, VAT treatment and product edition, then recheck on your decision date. Treat quote-only prices as unknown, model low, expected and high cases, and reconcile the first invoices. Employee net pay, PAYE remittances and pension contributions are not software costs.
Before you act
- Use the fixed scenarioone limited company based in England, one PAYE scheme, 12 monthly-paid employees, two users and one pension.
- Record the source, edition, date, VAT treatment and promotion for each price.
- Reconcile the first invoices against the order form and model.
Common questions
Why can't I compare a price for five monthly employees with a bureau licence?
Public prices use different employee bands, products, billing periods and bundles, so build separate cases when the buyer model changes.
How should I treat quote-only pricing from a supplier?
Treat quote-only pricing as unknown until the supplier provides a written proposal, and do not record it as zero.
What should I do with supplier figures on the decision date?
Recheck every supplier figure on the decision date, keep a source beside each assumption and preserve the earlier model to explain variance.
