Once you employ someone, PAYE has to run every payday: an FPS to HMRC on or before payday, payslips, payments to HMRC each month or quarter, and year-end P60s. A micro employer with one to nine staff has two ways to get that done. This post sets out what each route covers, what you can't hand over, and a simple way to decide. Our post on UK payroll providers compares named bureaus and apps; this one is about the decision itself.
What changes when you outsource payroll
GOV.UK describes two options: doing it yourself with payroll software, or paying a payroll provider to do it for you. It adds that some providers also keep employee records, provide payslips and make payments to HMRC, so what you buy depends on the provider.
GOV.UK: as an employer you're legally responsible for completing all PAYE tasks, even if you pay someone else to do them. You also remain responsible for collecting and keeping records of your employees' details.
So outsourcing moves the work, not the responsibility. If a bureau sends a late FPS or underpays HMRC, the penalty letter comes to you. Choose a provider whose contract says what happens when they make a mistake.
You also keep some work. A bureau can only report what you tell it, so each payday you still send hours, overtime, sickness and holiday, plus new starters' details and leavers' last days, before its cut-off. Late or wrong information from you becomes a late or wrong FPS from them.
What running payroll software yourself involves
GOV.UK says you must use payroll software that reports PAYE online, unless you're exempt. The software records employee details, works out pay and deductions, reports to HMRC, works out what you owe and calculates statutory pay such as sick or maternity pay.
| Task | When |
|---|---|
| Full Payment Submission (FPS) | On or before each payday, including everyone you pay |
| Employer Payment Summary (EPS) | By the 19th after the tax month, to claim reductions or report a month with no pay |
| Pay HMRC | By the 22nd of the next tax month if you pay monthly (19th by post), or the 22nd after each quarter if you pay quarterly |
| Payslips | On or before payday |
| P60s | To everyone employed on 5 April, by 31 May |
For one or two people on a fixed salary, this is an hour or two a month once set up. Varying hours, statutory pay, pension contributions and leavers each add work and more ways to make a mistake.
What does each route cost?
Software can cost nothing. GOV.UK lists free HMRC-recognised payroll software for businesses with fewer than 10 employees, including HMRC's own Basic PAYE Tools, and paid desktop software starts low: Moneysoft Payroll Manager listed £95 a year plus VAT for up to 20 employees on 8 October 2026.
Bureau prices are usually quoted per business, so get two or three written quotes covering the same items: payslips, RTI, pension submissions, P60s, leavers, and payments to HMRC if you want them made for you. The true cost of doing it yourself is your time each payday plus the time to put errors right.
Outsource or use software: how to decide
| Your situation | Leans towards | Why |
|---|---|---|
| One or two staff on fixed monthly pay | Software | Same figures each month; free software may be enough |
| Director-only company paying a salary | Software | One person, few changes, usually a fixed salary |
| Hourly staff, shifts or frequent starters and leavers | Outsourced | More changes each payday and more room for error |
| Statutory pay or pension changes coming up | Outsourced, at least for that period | SSP, SMP and auto enrolment add rules to apply correctly |
| An accountant already does your books and returns | Ask them first | Adding payroll to an existing engagement is often simplest |
| You keep missing the FPS deadline | Outsourced | Late reports bring HMRC penalties |
Many micro employers start with software and outsource later, or the other way round. Before switching, GOV.UK warns that some software won't let you keep the same payroll IDs; if they change, you mark the payroll ID changed indicator for each employee on the FPS, or HMRC may duplicate records.
Questions to ask a payroll bureau
- Which tasks are in the price: FPS, EPS, payslips, P45s, P60s, pension files, P11D?
- Do you pay HMRC and staff for us, or tell us what to pay?
- What do you need from us, and by which day before payday?
- What does a leaver, a new starter or an extra pay run cost?
- If you make an error that leads to an HMRC penalty, who pays it?
- Which HMRC-recognised software do you use, and can we take our data with us if we leave?
Where PayDocs fits
PayDocs isn't a bureau or payroll software and doesn't send anything to HMRC. It makes payslips and P60 employee copies from your figures, for employers whose software doesn't produce a payslip they're happy with, or who need one payslip for one period. PayDocs works out PAYE income tax, National Insurance and supported deductions for 2026/27 pay dates. Previewing is free; a PDF is £3.99 per payslip once checkout opens.
This is general information about the rules for employers in the UK, not tax or legal advice.
Questions
Am I still responsible if I outsource payroll?
Yes. GOV.UK says that as an employer you're legally responsible for completing all PAYE tasks even if you pay someone else to do them, and for collecting and keeping your employees' records.
Is there free payroll software in the UK?
Yes. GOV.UK lists free HMRC-recognised payroll software for businesses with fewer than 10 employees, including HMRC's Basic PAYE Tools. Check that a free product does the things you need, such as payslips and pension deductions.
What does running payroll software yourself involve?
Sending an FPS on or before each payday, an EPS by the 19th when needed, paying HMRC by the 22nd, giving payslips on or before payday and P60s by 31 May, all through HMRC-recognised software.
Should a micro employer outsource payroll?
Outsource when pay changes often, statutory pay or pensions add complexity, or deadlines keep slipping. One or two people on fixed pay usually manage well with software, often free.
Sources
- GOV.UK: PAYE for employers, choose how to run payroll
- GOV.UK: Payroll software
- GOV.UK: Find payroll software that is recognised by HMRC
- GOV.UK: Running payroll, reporting to HMRC (FPS)
- GOV.UK: Running payroll, Employer Payment Summary (EPS)
- GOV.UK: Pay employers' PAYE
- GOV.UK: PAYE forms P45, P60 and P11D, P60
- GOV.UK: Payslips
- Moneysoft: Payroll Manager prices (checked 8 October 2026)
Sources checked 8 October 2026. This article explains how pay documents work; it is not tax or legal advice.
