There are huge advantages to outsourcing your payroll operations to a dedicated payroll provider. Aside from the obvious time befits of outsourcing, they have specific domain expertise and provide the piece of mind that comes with knowing you are compliant and covered.
NB: If you’re thinking of doing it yourself, check out our guide to the best UK payroll software and be sure to peruse our handy beginners guide to UK payroll.
1. Moorepay – Best overall payroll provider
Moorepay stands at the forefront of UK payroll services, bringing over 50 years of experience to the table. Their cloud platform combines payroll and HR functions into one sleek system that makes employee data analysis feel effortless. They’ve earned CIPP’s Payroll Service Provider of the Year Award in 2023, and big names like McDonald’s and Volkswagen trust them with their payroll. Their UK-based specialists offer practical guidance on everything from basic payroll questions to complex tax matters. Small businesses particularly love their free holiday calculators that quickly figure out leave entitlements for part-time and zero-hour workers.
Advantages:
- CIPP Payroll Assurance Scheme accredited
- Strong customer support via phone and live chat
- Comprehensive HR integration
- Free holiday calculators
- Custom reporting capabilities
Limitations:
- No international payroll support
- Lacks live training sessions
- Pricing only available through quotes
- No chatbot support
2. Payescape – best for short-term Contracts
Payescape takes a different approach with their rolling monthly contracts – perfect if you’re not ready for a long-term commitment. Based in Ballymoney, Northern Ireland, they’ve built their reputation on making payroll straightforward for small businesses since 2006. Their three-ring phone answer policy means you won’t wait long for help, and they’ve packed their knowledge center with video tutorials and how-to guides. Their team all holds CIPP qualifications, so you know you’re in good hands.
Advantages:
- Flexible rolling monthly contracts
- CIPP-qualified support team
- Strong integration with accounting software
- Custom reporting options
- Comprehensive training resources
Limitations:
- No international employee payments
- Limited payroll changes reporting
- Single office location may limit access
- No face-to-face support outside NI
3. MHR – best for reporting
MHR brings serious muscle to payroll reporting with their iTrent software, winner of CIPP’s Software Product of the Year 2023. They excel at turning complex employee data into clear insights – something Microsoft Azure and Experian have noticed. Their visualization tools make presenting performance data to stakeholders a breeze. They operate from Nottingham and Glasgow, offering solid phone and chat support.
Advantages:
- Advanced reporting and analytics
- Strong data sharing capabilities
- Comprehensive compliance tools
- Award-winning iTrent platform
- Multiple UK office locations
Limitations:
- No live training sessions
- Limited compliance guidance
- Complex interface for beginners
- Pricing requires custom quotes
4. Frontier – best for international business
Frontier steps up for international businesses, handling payroll across 26 countries. With offices spread across Surrey, Warrington, Nottingham, and Gloucester, they’re within reach for many English businesses. Their mobile app lets employees submit timesheets and check payslips on the go.
Advantages:
- Handles international payroll
- Live training available
- Multiple UK locations
- Strong mobile app functionality
- CIPP PAS accredited
Limitations:
- No open API for integrations
- Limited compliance advice
- No chatbot support
- Complex implementation process
5. OneAdvanced – best for training
OneAdvanced shines in the training department. They support over 22,000 customers globally and offer various learning formats – live sessions, video tutorials, and written guides. With nine UK offices, including one near London City Airport, they’re never far away. They handle complex salary structures and multiple payroll interfaces with ease.
Advantages:
- Comprehensive training program
- CIPP-accredited expert advice
- Extensive UK office network
- Custom reporting capabilities
- Strong phone and chat support
Limitations:
- No open API
- Lacks mobile app
- No chatbot assistance
- Complex system navigation
6. ADP – best for security
ADP brings serious security credentials to the table. This industry veteran has claimed the Global Payroll Supplier of the Year award two years running and dominated the CIPP Annual Excellence Awards for four straight years. Their mobile app doubles as a clock-in system – perfect for managing rotating shifts. They maintain offices in Staines-upon-Thames and Cheadle, though pricing details remain under wraps.
Advantages:
- Strong security protocols
- Robust mobile app with clock-in
- Custom reporting features
- Tax education resources
- International capabilities
Limitations:
- Limited payroll change reporting
- No transparent pricing
- No chatbot support
- Email support not available
7. TopSource – best for native integrations
TopSource rounds out the top providers with their comprehensive service suite. From their Birmingham base, they handle everything from HMRC registration to year-end processing. Their native platforms cover HR, recruitment, and benefits management, with ready-made integrations for popular accounting software like Sage and Xero. They’ll process international payroll too, though their reporting lacks customization options.
Advantages:
- Comprehensive native software suite
- Strong compliance tools
- International payroll capability
- Ready-made accounting integrations
- ISO 27001 certified
Limitations:
- No custom reporting
- Limited training options
- Single UK office location
- No transparent pricing structure
Each provider sets their prices based on your specific needs – employee count, pay frequency, and extra features all play a part in the final quote. Most won’t publish standard rates, so you’ll need to contact them directly for accurate pricing. Small businesses might want to check out Iris Staffology, who buck this trend by advertising their prices upfront.
UK managed and outsourced payroll services FAQs
What is a managed or outsourced payroll service?
A managed payroll service takes over your company’s entire payroll operation. They’ll handle everything from processing payments and generating payslips to dealing with HMRC as your PAYE-registered agent. Think of them as your dedicated payroll department, just sitting in a different building.
How does managed payroll work?
Once you’ve partnered with a payroll provider, they’ll use their specialist software to process your payroll in line with your staff contracts. They’ll make sure everyone gets paid the right amount at the right time, handle all the paperwork, and keep you compliant with tax and employment laws. You’ll still have oversight of the process – most providers let you review everything before payments go out.
What are the benefits of outsourcing payroll?
Money and time are the big ones. You won’t need to hire in-house staff or buy expensive payroll software, and the service typically costs less than maintaining an internal team. Plus, you’ll free up time you’d otherwise spend on admin tasks. The providers also keep up with all the latest tax and employment law changes, so you don’t have to worry about accidentally missing something important.
What are the downsides of outsourcing payroll?
Some companies worry about losing control of their payroll process or sharing sensitive employee information. A good provider will address these concerns by letting you review everything before it’s finalized and showing you their information security certifications (look for ISO27001). You’ll also want to check if their systems can work smoothly with your existing HR and finance software.
How do pensions (workplace, auto-enrolment) work with managed payroll?
Your payroll provider will typically handle all the pension-related admin, including auto-enrolment requirements. They’ll figure out which workers are eligible, calculate the right contributions, and either give you reports for your pension scheme or upload them directly to the relevant pension portals.
How much does managed or outsourced payroll cost?
Most UK providers charge per payslip rather than a flat fee. This means your costs scale with your business size, which often works out cheaper than maintaining an in-house team. You’re not just paying for processing – you’re also getting protection against compliance penalties, which can be expensive if you make mistakes handling payroll internally.
Is outsourced payroll mainly for big companies, or do small businesses use it too?
Companies of all sizes use managed payroll services. There’s no minimum or maximum number of employees required. Whether you have five employees or five thousand, you can benefit from the time savings and expertise these services provide. In fact, smaller companies often find it especially helpful since they might not have the resources to maintain a dedicated payroll department.