How Much Do Accountants Charge for Payroll Services in the UK?

After the UK Government announced its Furlough Scheme in March 2020 during the Coronavirus outbreak, the need for payroll services expanded throughout the region. Payroll isn’t about just transferring money; it’s a compliance-sensitive game. From PAYE, NI, and pension deductions to RTI reporting, if you get it wrong, it can cost your business dearly. 

Especially small business owners in London often find themselves confused about the pricing. But fear not. This blog will clear up what accountants really charge for payroll in the UK.

After reading this blog, you’ll have a clear concept of:

• What is a payroll service
• What’s typically included in payroll services
•  How much do accountants charge 
• What factors affect payroll pricing
• Why payroll outsourcing is important 

 So, let’s begin. 

What is Payroll Services? 

Payroll service refers to the process of managing and handling all tasks related to paying employees. It ensures that staff are paid accurately and on time to make sure the business complies with tax and employment laws. 

As a small business owner, this arrangement can benefit you as it saves time and ensures all employees and taxes are paid accurately and on schedule. 

What’s Included in Payroll Services? 

A good payroll service does more than just pay your employees on a recurring cycle. It manages a range of compliance, calculation, and communication tasks to keep your business operating smoothly and legally. 

This includes- 

• PAYE Registration

A professional payroll service accountant will set up your business with HMRC so you can legally employ staff and handle their income tax, along with contributing to the national insurance policy. 

• Payslip generation 

Payroll services typically include creating and distributing legally compliant payslips for each employee that show gross pay, deductions, and net pay. 

• RIT Submissions

Record employee payments are recorded in real-time by filing payroll data with HMRC compliance with UK tax laws. 

•  Tax, insurance, and pension calculation

Accurate calculation of income tax, NI contributions, and pension deductions to ensure your staff and HMRC are paid the correct amounts every time. 

• Auto-enrolment pension setup

Enrol eligible employees into the workplace pension scheme and manage their ongoing pension contributions and compliance. 

 

This includes P60 (end-of-year tax summary for current employees) and P45 (issued to employees for leaving your company that summarises their earnings and tax paid to date). 

• Employee onboarding and leaver processing

Handle the HMRC starter checklist, new starter data entry, and leaver documentation when staff join or exit your company. 

• Holiday pay and statutory leave tracking 

Manage paid leave, maternity/paternity pay, sick pay, and ensure correct entitlements are applied for each employee. 

Special note: Not all payroll services providers include everything in their base price. Some may charge extra for pensions, CIS payroll, or leaver documentation. It’s better to always check what’s included up front to avoid hidden costs or compliance gaps. 

 

How Much Do Accountants Charge for Payroll Services in The UK? 

Before mapping out the average cost of accountants for payroll services, you need to decide to what extent you want the support. If you own a small business in London, you should consider the following: 

There are fully managed payrolls where every single aspect of your payroll is outsourced to your selected service provider. 

In terms of part-managed payroll, the processes are split up with in-house accounts. In this case, usually, the complex and time-consuming process, like end-of-year filing or HMRC reporting, gets outsourced. 

However, the average payroll fees in 2025 estimated: 

Business Size	Payroll Frequency	Average Monthly Cost
1–8 employees	Monthly	£25–£60
9–15 employees	Monthly	£ 50–£120
11–20 employees	Monthly	£75–£250
25+ employees	Monthly	Custom quote

Note: Weekly payroll costs more due to higher processing frequency.

Extra Charges to Watch For:

• Auto-enrolment compliance: £50–£100 setup
• CIS payroll (for contractors): Often priced separately
• Year-end filing: May be billed as a one-off

Factors that Affect Payroll Pricing in The UK

Factor	Impact
Number of employees	More employees = more work
Frequency (weekly/monthly)	Weekly is a higher cost
Software used	Cloud tools = more efficiency
Add-on services	e.g., pensions, HR support
Manual vs automated processes	Automation reduces costs
Complexity	Bonuses, sick pay, and tax codes add complexity

Top 5 Reasons to Outsource Payroll Services in the UK

Outsourcing payroll isn’t just for big corporations—small and medium-sized businesses across the UK are increasingly turning to professional payroll providers. Here\’s why:

1. Ensure HMRC Compliance

UK payroll is tightly regulated. From Real Time Information (RTI) submissions to pension auto-enrolment and tax code updates, staying compliant can be tricky. A payroll expert ensures:

• Timely and accurate HMRC filings
• Up-to-date processes that follow the latest UK legislation
• Avoidance of costly penalties or late submissions

2. Save Time and Reduce Admin Work

Manual payroll processing is time-consuming. By outsourcing, you eliminate:

• Data entry
• Payslip calculations
• Employee queries and leave tracking

This frees up valuable time so you can focus on growing your business.

3. Cost-Effective for Small Businesses

Hiring in-house payroll staff or buying software licenses can be expensive. Outsourcing allows you to:

• Pay only for the service you need (e.g. per payslip or monthly fee)
• Avoid training, software, and compliance costs
• Get expert service at a fixed, manageable price

4. Gain Access to Payroll Experts and Tools

Outsourced providers use advanced tools like Xero, QuickBooks, and BrightPay, ensuring:

• Automation of payroll tasks
• Fewer errors
• Better reports and record-keeping

Plus, you get advice from professionals familiar with UK tax, pensions, CIS, and employment law.

5. Professional Image & Employee Satisfaction

Accurate, on-time payslips build employee trust. A good payroll service provider ensures:

• No delays in salary payments
• Proper handling of bonuses, leave, and deductions
• Easy access to payslips and records

Your employees feel valued, and your business looks professional.

Bonus Tip: Partnering with a trusted firm like Taj Accountants means your payroll is managed by an HMRC-registered agent. So it is 100% secure, affordable, and stress-free.

Why Taj Accountants is Your Trusted Payroll Services for Small Businesses in London

At Taj Accountants, we are proud to serve London’s small businesses with payroll solutions featuring: 

• Transparent, competitive fixed‑fee pricing—no hidden fees
• Flexible packages for micro to growing firms
• HMRC‑registered payroll agents
• Specialist understanding of CIS, zero‑hour contracts, and multiple locations
• Expert integration with cloud‑based tools like Xero, QuickBooks, BrightPay
• Clear, multilingual support from our East London team
• Based in Whitechapel, but serving all of London and beyond

Conclusion

Regardless of the size of your business, hiring professional payroll support saves time, reduces risk, and ensures compliance. The wisest decision you can make as a founder is to outsource payroll service providers who do the heavy lifting for your business to keep it rolling. 

Frequently Asked Questions

How much does it cost to outsource payroll in the UK?

Typically £3–£10 per payslip or £25–£250+ per month, depending on team size and services.

Is it cheaper to do payroll in-house?

Not necessarily. The administration, software, HR time, and risk of errors often outweigh costs.

Can Taj Accountants help with CIS payroll?

Yes, we handle contractor payroll under CIS as a separate, specialised service.

What happens if I file payroll late?

HMRC can impose fines and penalties. Outsourcing ensures timely RTI submission.

Do I need payroll software if I hire Taj?

No. Our cloud‑based systems (Xero, QuickBooks, BrightPay) handle everything included in the fixed-fee service.

Meta: 

This blog is your ultimate guide to understanding the detailed cost of outsourcing payroll services in the UK.