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How much do Payroll Services cost?

Average Price
£4 - £10 per employee, per month

What is the price of Payroll Services?

Looking for someone to handle your payroll? Read our handy guide to find out how much you can expect to pay for payroll services.

What are Payroll Services?

Payroll services involve outsourcing your payroll to a payroll provider. This completely hands-off approach to payroll will save you both time and effort, as well as helping you to remain compliant with employment legislation.  

Your payroll provider will liaise with HMRC on your behalf. This includes handling the calculation of tax deductions from your employees’ gross salaries, as well as sick pay and student loan deductions. This will help to minimise your risk of fines.

Payroll service providers will also deal with any enquiries from your employees, as well as creating and distributing payslips, P45s and P60s. This takes another job off your plate, leaving you to deal with what’s important in your business.

How much do Payroll Services cost?

Outsourcing your business’ payroll can save you both time and effort, but how much do payroll services cost?

The price of payroll services will depend on the number of staff that you employ and the frequency with which you pay them. Although there is no fixed rate for payroll services, a breakdown of average costs of outsourcing your payroll based on UK payroll providers is given below.

Average cost of Payroll Services
Average cost (per employee, per month)£7
Minimum cost (per employee, per month)£4
Maximum cost (per employee, per month)£10

What changes the price of Payroll Services?

The price of hiring a payroll management company will depend on several factors including:

  • Number of employees

  • Frequency of payment

  • Setup costs

  • Additional services

Number of employees

The price of outsourcing your payroll to an external payroll provider will depend on the number of people that you employ. The cost is typically calculated per employee, but the majority of payroll providers will offer a reduced rate for larger businesses. This means that the larger your workforce is, the lower the individual cost per employee will become.

Frequency of payment

The cost of using a payroll provider will also depend largely on how often you pay your employees. The average prices above are based on businesses that pay their employees monthly. If you pay your employees on a weekly or fortnightly basis, you’ll be looking at a higher cost to outsource your payroll as the workload is increased.

Setup costs

There is likely to be a small set up fee for each of your employees. This cost is generally nominal, averaging around £2 per employee. You’ll incur this charge when you first hire the payroll company and again whenever new employees join your payroll.

There’s often also a small fee for enrolling your employees into a pension plan. Again, this is usually nominal at around £2 per employee.

Additional services

Some payroll companies also offer HR and other accounting services. If you opt for an integrated service, you’ll notice the fees increase quite significantly due to the additional workload required. It’s worth considering what you want to keep in-house and what you’d like to outsource.

Is it worth outsourcing your payroll?

It’s perfectly possible to manage your payroll in-house. However, you’ll need to have experience in managing payroll and a good knowledge of the legal requirements to ensure that you don’t end up with a fine.

If you have a larger business which employs several people, payroll can quickly become overwhelming and take over your day-to-day work. Hiring an in-house payroll specialist can work well, but you’ll need to make sure you’ve got back up in case they call in sick on payday.

Outsourcing your payroll means that you concentrate on what really matters to your business whilst leaving your payroll to the experts. You can feel confident in the knowledge that your legal duties will be complied with and you’ll be less likely to be hit with a fine.  

It’s hard to know where to start when you’re looking for payroll services. At Bark, we understand how difficult it can be to find the right payroll provider. That’s why when you search for a payroll provider on Bark, you can browse the profiles of companies that meet your requirements and read reviews from genuine clients before requesting a quote.

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The average rating for Bark Payroll Service Providers is 4.87, based on 108,949 reviews


based on 108,949 reviews

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