The checks to run before choosing payroll software, from PAYE fit to exit

Complete this checklist with payroll, finance, HR, security and privacy owners before signing a contract. Record evidence and an owner beside every answer. A supplier demonstration is useful, but a controlled trial with representative synthetic cases is stronger.

Employer and PAYE fit

• List legal employers, PAYE schemes, pay frequencies and current employee counts.
• Document directors, irregular workers, starters, leavers, statutory payments, benefits and deductions that must be supported.
• Confirm the exact edition appears on HMRC's current recognised software list.
• Check required FPS, EPS and year-end journeys, including corrections and acknowledgements.
• Record who remains responsible for every approval, report and payment.

HMRC recognition is not a recommendation. Its payroll software guide also warns that products differ in functions such as payslips, pensions, mixed pay periods and certain reports.

Pension and payment workflow

• Test worker assessment, postponement, communications, opt-in, opt-out and contribution calculation.
• Confirm supported pension providers, exchange methods, response states and reconciliation.
• Map payment-file creation, approval, bank or bureau hand-off and duplicate prevention.
• Ensure rejected and partial outcomes remain visible until repaired.

Use the Pensions Regulator's payroll-software task list to challenge automatic-enrolment support rather than accepting a generic pensions tick.

People and controls

• Give preparers, approvers, administrators and auditors separate permissions.
• Test joiner, mover and leaver access plus emergency administration.
• Require a tamper-evident history of data, configuration, approvals and submissions.
• Check how the product explains calculations and blocks unsafe duplicates.
• Decide which actions require two people.

Security and privacy

• Map employee information, special category data, bank details and identifiers.
• Identify hosting locations, subprocessors and international transfers.
• Review encryption, authentication, session controls, monitoring and vulnerability handling.
• Set retention, deletion, subject-rights and incident-notification processes.
• Agree controller and processor terms with qualified review where needed.

Implementation and service

• Assign owners for configuration, migration, validation and parallel runs.
• Reconcile opening balances, identifiers, year-to-date figures and pension records.
• Test support authentication and a payroll-blocking incident.
• Obtain maintenance, availability, recovery and escalation commitments.
• Define the evidence required before go-live and the conditions for rollback.

Price and contract

• Compare one normalised annual total using the same workforce assumptions.
• Include implementation, training, support, payments, integrations, storage and exit.
• Model employee growth, extra runs and a mid-year migration.
• Read renewal, indexation, minimum term, liability and suspension clauses.
• Confirm usable exports, deletion evidence and transition help at exit.

Decision record

Reject products that fail a mandatory payroll outcome even if their weighted score is high. For the finalists, store scenario results, unanswered questions, supplier evidence, contractual gaps, residual risks and approval names. Do not convert an untested supplier claim into a review finding.

Finalist trial cases

• Run an ordinary pay period and reconcile every employee and control total.
• Process a starter with the available official information, then inspect the submission record.
• Correct a material input after approval and verify the updated outcome without duplication.
• Model sickness, family leave or another statutory case relevant to the workforce.
• Complete pension assessment, exchange and reconciliation with representative categories.
• Withdraw access from an administrator and confirm that historic actions remain attributable.
• Restore an agreed export in a clean environment or demonstrate the documented recovery route.
• Produce the data needed to leave the supplier without relying on screenshots or proprietary reports.

Record expected and actual results, assistance, elapsed operator time and unresolved differences. Use fictitious identities and controlled values. A live employee should not become an experiment merely because a trial environment lacks a particular feature.

Ask the finalist to respond in writing to each failed case. A planned feature is not current capability, and a workaround should be assessed for training, control and recurring effort.

Before publication or purchase, reopen official sources, check the current tax-year version and repeat critical cases. The selected product should fit the employer's real workflow and provide evidence when something goes wrong, not merely look polished during a prepared demonstration.