How to outsource payroll: a practical guide for UK accounting firms

Why accounting firms outsource payroll

Payroll has a narrow compliance window. RTI submissions must reach HMRC on or before the payment date for employees — not within a few days, not by the end of the month. On or before. This means payroll must be processed accurately, every cycle, with zero tolerance for data errors that would require a late correction submission.

For practices managing payroll for multiple clients, this creates a production challenge that is qualitatively different from bookkeeping or accounts preparation. Every payroll client has a fixed deadline that cannot be negotiated. A team member being off sick, a client sending data late, or software connectivity issues on the submission date can all cascade into compliance problems for clients you've made commitments to.

Outsourcing payroll processing to a specialist partner removes this risk from your practice. The processing obligation moves to the partner. Your obligation becomes reviewing and approving the output before it goes to the client — a fraction of the time it takes to run payroll yourself.

What does outsourced payroll processing actually include?

A full white label payroll processing service should cover:

• Monthly or weekly payroll calculation — gross pay, tax, employee NI, employer NI, pension contributions, student loan deductions
• RTI Full Payment Submission (FPS) — filed to HMRC on or before each pay date, direct via HMRC API
• Employer Payment Summary (EPS) — filed where no employees are paid or to reclaim statutory payments
• Statutory payments — SSP (Statutory Sick Pay), SMP (Statutory Maternity Pay), SPP (Statutory Paternity Pay), ShPP (Shared Parental Pay) calculated and included correctly
• Auto-enrolment — pension contribution calculations, employee and employer amounts, communication obligations
• CIS subcontractor payroll — where the client pays subcontractors under CIS, deduction calculations and CIS300 monthly returns
• P60s and P11Ds — year-end documents prepared and distributed
• Payslips — delivered to employees or to the practice for onward distribution

The 2025/26 key payroll figures

How to structure a white label payroll service

The model is the same as white label bookkeeping: your practice takes the client relationship, the outsourced processor handles the production, and the output comes back to you under your brand for review before going to the client or being submitted to HMRC.

The data collection workflow

The biggest friction point in payroll is always data collection. Getting timesheets, changes, new starters, and leavers from clients before the processing deadline is the source of most payroll problems. A good outsourced payroll workflow includes a standardised data collection template and a clear deadline — typically five working days before the pay date — so there is time to process, review, and correct before the RTI submission goes.

Clients who regularly send data late are a payroll risk. Part of structuring a white label payroll service is setting clear client expectations about what happens to their submission if data arrives after the deadline.

Review and approval before RTI

In a properly structured white label arrangement, you review the payroll output before it goes to HMRC — not after. The processing partner delivers a payroll summary showing all employees, gross pay, deductions, and net pay. You check it against the data provided by the client and approve it. Only then does the FPS go to HMRC. This review step is your quality control — and it's what justifies the service fee you charge the client.

How to price payroll outsourcing

Payroll is typically priced per employee per month or per payroll run per month. The market rate for accounting firms charging clients varies, but the structure below is a solid starting point:

For smaller payrolls (1–3 employees), a minimum monthly fee of £30–£50 is standard practice — otherwise the admin overhead of running a one-person payroll outweighs the revenue.

Additional fees to consider

• New starters and leavers — some practices charge £10–£15 per new starter or leaver P45 processing
• P60s and P11Ds — year-end documents can be charged as a one-off annual fee per payroll
• Auto-enrolment setup — if a new client needs pension scheme setup and initial auto-enrolment letters, this is typically a one-time setup fee of £100–£200
• Late data surcharge — some practices add a surcharge for clients who consistently deliver data after the agreed deadline

RTI — the non-negotiable

Real Time Information (RTI) is the mechanism by which employers and their agents report payroll data to HMRC. Every payment to an employee must be reported via an FPS on or before the payment date. There is no grace period. Late FPS submissions can result in automatic penalties — £100 per month for most employers, more for larger payrolls.

When you outsource payroll to bookd., RTI submissions are made via our direct HMRC API connection on or before the agreed submission date. There is no bridging software, no manual upload, no dependency on third-party portals. The submission either goes or it doesn't — and if it doesn't for any reason, you are notified immediately.

What to look for in a payroll processing partner

• ICB Level 3 Payroll Diploma or equivalent qualification — payroll involves statutory payment calculations and employment law obligations. Qualification matters.
• Direct HMRC RTI submission — not via a third-party portal. Direct API access means fewer failure points.
• Clear data cutoff and turnaround commitments — you need to know when to send data and when to expect output back.
• White label capability — all outputs (payslips, summaries, P60s) should be producible under your brand.
• CIS payroll experience — if any of your clients use subcontractors, the partner needs to handle CIS alongside regular payroll.
• Auto-enrolment compliance — pension contributions, re-enrolment cycles, and NEST/provider integration.