How much does payroll cost for a small business UK?
A plain-English guide to UK small business payroll costs — what software costs, what a managed bureau charges, what is included, and where the real cost difference lies.
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Direct answer
Payroll costs for a UK small business range from £10–£60 per month for payroll software (plus the owner's time to operate it) to £45–£200 per month for a managed payroll bureau that handles everything. For a business with 1–10 employees, a managed bureau typically costs between £45 and £249 per month including PAYE calculations, payslips, HMRC RTI submissions, starters and leavers, pension figures and all monthly deadlines.
What does payroll cost in the UK? A breakdown by provider type
Provider
Monthly cost
What's included
What's not included
Payroll software
£10–£60/month
Calculations, payslip templates, filing tool
Your time to operate it — typically 1–3 hrs/month
Accountant-led payroll
Varies, often bundled
Depends on practice — can be basic RTI only
Often year-end focus, not always monthly filing
Managed payroll bureau
£45–£200/month
Full monthly process, RTI, payslips, records
Catch-up/backlog work (quoted separately)
Bookd Finance (bureau)
From £79/month
Full process, RTI, payslips, pension, records
No setup fee on standard payrolls
Why software cost and total cost are different numbers
The subscription cost of payroll software looks cheap. Xero Payroll sits inside the Xero subscription. BrightPay charges per employer. Most software costs under £600 per year.
The real cost is different. Running payroll software correctly every month takes time — typically one to three hours for a basic payroll: collecting data, entering starters and leavers, checking tax codes, running the payroll, reviewing payslips, filing RTI, confirming the PAYE liability and making the payment. For a business owner whose time is worth £50–£100 per hour, that is £600–£3,600 per year in time cost on top of the software subscription.
A managed bureau at £149 per month — £900 per year — includes all of that. The business owner's job is to send the payroll data and confirm approval. Total monthly time: under ten minutes.
What affects the monthly cost of a payroll bureau?
Payroll bureau pricing is based on several factors. Understanding them makes it easier to get an accurate quote.
Employee headcount
The primary cost driver. More employees mean more payslips, more calculations and more RTI data.
Payroll frequency
Monthly payroll costs less to manage than weekly. Frequency affects the number of FPS submissions per month.
Complexity
CIS subcontractors, variable hours workers, statutory payments, directors and multiple employment types all add processing time.
Catch-up work
If historical records are missing or incorrect, initial catch-up is quoted separately from the ongoing monthly fee.
Pay frequency mix
A business paying some staff weekly and some monthly is more complex than one with a single pay run.
Pension handling
Auto-enrolment assessments and pension file preparation are included in standard Bookd packages.
Bookd pricing — what does it cost?
Bookd provides managed payroll and CIS services with transparent monthly pricing. No setup fees on standard payrolls.
Package
Best for
From per month
Starter Payroll
1–3 employees or directors
£79
Small Business Payroll
4–10 employees
£149
Growing Payroll
11–25 employees
£249
CIS Starter
CIS subcontractors, no PAYE
£149
Construction Payroll & CIS
PAYE staff + CIS subcontractors
£299
Construction Control Pack
Higher volume construction
£300
Final pricing is confirmed following a free payroll check, which reviews your current headcount, complexity and any catch-up requirements.
Free · No obligation
Get an exact quote for your payroll. A free payroll check takes one working day and comes with no obligation.
Small business payroll costs vary by provider type. Payroll software costs £10–£60 per month in subscription fees, plus the owner's time to run it. A managed payroll bureau charges a monthly fee — typically £79–£249 for 1–10 employees — and handles everything. For most small businesses, a bureau costs less per hour of business-owner time saved than any software solution.
The subscription cost of payroll software is lower than a bureau fee. However, software does not include the operator's time — typically 1–3 hours per month for a basic payroll. When that time is valued at a business owner's hourly rate, a managed bureau is often cheaper in total cost terms, not just in compliance risk.
Some bureaus charge a one-off setup fee. Bookd does not charge setup fees on standard payrolls. Catch-up work — where historical payroll records need to be corrected or backdated — is quoted separately as it involves additional work outside the monthly process.
Yes. CIS subcontractor processing requires additional work: verification with HMRC, deduction calculations, payment summaries and monthly return filing. CIS-only packages typically start from £149 per month. Combined PAYE and CIS packages start from £299 per month. Per-subcontractor pricing is available from £9.50.
A managed payroll bureau fee typically includes: payroll processing, payslip production, HMRC RTI submissions, tax code management, starter and leaver processing, pension payroll figures, monthly employer summary and deadline reminders. P60 production at year end is also typically included.
Yes. Per-payslip pricing (typically £3–£8 per payslip) is common for accountancy practices using white-label payroll services. For direct clients, fixed monthly pricing provides cost predictability and is usually the better value option for businesses with a consistent employee count.