Costs and pricing
Part of Payroll software for one employee UK: is it worth it?
Payroll software for one employee UK: is it worth it?
We compare BrightPay, Moneysoft, Xero, QuickBooks and Sage for one-employee UK payroll, with cost figures and a clear verdict on whether to pay.
What to take away
- Payroll software is optional, not mandatoryHMRC accepts RTI submissions from its free tools as well as paid products.
- One employee still brings PAYE, minimum wage, record-keeping and, usually, pension assessment duties.
- A sole director with no employment contract and no other staff normally sits outside auto-enrolment.
- Software earns its fee when pay varies, pension assessment needs a record, or corrections become routine.
- Verdictpaying is worth it for one employee only when pay varies or pension assessment needs a record; otherwise use HMRC's free tools.
The duties that apply before you choose software
Even a single employee brings the full set of employer duties. You operate PAYE, report through Real Time Information on or before each payday, and keep records for three years after the tax year ends.
Employer duties for one employee
- Operate PAYE
- Report RTI on or before payday
- Keep records three years
- Pay National Minimum Wage
- Assess and enrol for pension
- Protect employee personal data
Pay must reach the National Minimum Wage for the worker's age band, and deductions such as salary sacrifice cannot take it below that floor, as the National Minimum Wage Act 1998 sets the framework.
Pension duties are separate. You assess each worker for auto-enrolment, and where they qualify you enrol them, deduct contributions and pay an employer contribution on qualifying earnings. The Pensions Act 2008 is the starting point.
Employee data carries obligations too: names, bank details and payslips are personal data, so you need a lawful basis and a retention period you can defend, as the ICO's UK GDPR guidance explains.
What one employee costs
Software is rarely the largest line. Assume an illustrative £8 a month subscription, purely to show the arithmetic: that is £96 a year for one payslip a month.
Illustrative annual one-employee costs
- £96Software at £8 a month
- £300Your admin time, one hour a month at £25
Employer National Insurance begins once pay passes the secondary threshold of £5,000 a year per employee, announced in the October 2024 Budget and effective from 6 April 2025. The rate above it is 15%.
Pension contributions are calculated on qualifying earnings. Automatic enrolment minimums are 8% of qualifying earnings in total, with at least 3% paid by the employer.
Then add your own time. An assumed hour a month at an internal cost of £25 an hour comes to £300 a year, the largest figure in this worked example. Our payroll software budget covers the lines outside the subscription, from migration to renewal.
| Cost line | Illustrative annual figure |
|---|---|
| Software at £8 a month | £96 |
| Employer National Insurance | 15% of pay above the £5,000 secondary threshold |
| Employer pension | 3% of qualifying earnings |
| Your admin time, one hour a month at £25 | £300 |
Paid options for one employee
HMRC Basic PAYE Tools is the free baseline. It covers RTI but does not run automatic enrolment pension assessment.
BrightPay offers a free tier for up to three employees. Paid desktop plans add support and handle RTI and auto-enrolment.
Moneysoft Payroll Manager is a desktop package. Its annual licence is often around £100 plus VAT for small employers, and it includes pension assessment.
Xero Payroll is included with many Xero accounting plans, which Xero lists from about £20 a month plus VAT. A sole director already using Xero may pay no separate payroll fee, and it covers RTI and pension duties.
QuickBooks Payroll is an add-on to QuickBooks Online, typically priced at about £5 a month plus £1 per employee, so about £6 a month plus VAT for one employee. It runs RTI and pension calculations.
Sage Payroll is sold on a monthly subscription, typically from about £15 a month plus VAT for a small number of employees. It includes RTI and auto-enrolment, and it suits employers who want telephone support.
On price, QuickBooks Payroll is typically the cheapest paid option at about £6 a month plus VAT for one employee. For pension records, Moneysoft Payroll Manager at around £100 a year is the pick because its licence includes pension assessment.
A decision sequence for sole directors
Work through these steps before you pay for anything.
- Confirm whether you are a director with no employment contract or an employer with a worker.
- List the pay elements that changehours, overtime, expenses, pension.
- Check whether your accountant already runs PAYE for you.
- Run a free tool and a paid one side by side for two pay periods.
- Compare on time spent, corrections and pension records rather than price alone.
Keep the trial honest. If the free route produces the same submissions and the same pension records for one employee, the subscription may be a convenience purchase. That is a legitimate answer, and our comparison of payroll software with auto-enrolment shows which products record the assessment at all.
Common questions
Does one employee mean I must buy payroll software?
No. HMRC accepts RTI reports from its free tools, so software is a business choice rather than a filing requirement.
Is a sole director exempt from auto-enrolment?
Usually, where there is no employment contract and no other staff. Take on a second employee, or sign a contract that makes you a worker, and the duties return.
What does payroll software for one employee cost?
Treat the subscription as one line among several. Employer National Insurance, pension contributions and your own admin time usually outweigh it.
Can I run payroll myself without an accountant?
Yes, and one employee is well within reach for a careful owner-manager. The parts people get wrong are deadlines and pension assessment, not the arithmetic.
