Running your payroll can be a frugal and rewarding decision for a small business, but to make it work well and not become a headache, it’s important to get the right software in place. There are some great payroll software packages out there and some offer different options, so the first thing to do is to establish what your business needs from your payroll software.

On a basic level, most businesses will need a payroll software that can achieve the following:

• Record employee details
• Calculate all pay and relevant deductions
• Calculate any statutory pay
• Report in real-time to HMRC
• Calculate liabilities to pay HMRC

But you may also need to think about some other factors such as, producing payslips, pension deductions / payments, or managing differing pay periods.

As an employer, you are responsible for collecting taxes from your employees for HMRC and file reports on a regular basis. Every payday you will need to submit a full payment submission (FPS), which you will be able to achieve through your payroll software. This will show HMRC the payments you have made to your employees and any deductions made.

To be compliant with government guidelines you must:

• Make accurate payments and deductions
• Provide employees with a detailed payslips
• File and pay any taxes on time
• Manage any other relevant deductions (pensions, child care etc)
• Keep payroll records for a minimum of 3 years.

It can sound like a lot to do, but this is where the payroll software can be a useful tool if you don’t fancy the sound of pen and paper!

While there are hundreds of payroll software providers, we know a few that we’re happy to recommend. Below is a list of 5 great payroll software services that can help you manage your businesses payroll. They all share similar benefits and some are more budget-friendly options, some more sophisticated solutions with sister software for larger businesses and other tax and accountancy needs. All of them allow access for your accountant to help you with more complex payroll, accounting and tax requirements. It is worth considering a flexible solution that grows as your business grows.

HMRC Basic PAYE Tools – visit website

• This has been developed by HMRC itself
• It is a good starting option if you have a tight budget
• There is plenty of support from HMRC

Sage Payroll – visit website

• 3 month free trial and pricing thereafter is reasonable
• It is easy to get support and has step-by-step guides
• You can share access with your accountant
• Runs automated payroll calculations and submissions for up to 50 employees.

Xero – visit website

• 3 month free trial and pricing thereafter is reasonable
• Automatic tax, pensions and leave calculations
• Flexible pay calendars, tax and pay rates
• Employee self-service; allows employees access to review, submit leave requests etc.

KashFlow – visit website

• Real-time payroll updates
• Integrations with sister software such as KashFlow Bookkeeping
• Accommodates employee self-service
• Cloud-based software to access on any device with an internet connection.

BrightPay – visit website

• BrightPay has a longer trial period of 60 days and budget-friendly price plans
• Demo videos and support available
• Employee self-service portal
• Desktop application for processing with information stored on secure cloud server.

HMRC have helpfully provided a list of free payroll software they are happy to recommend. This may be a good starting place if you don’t want to invest in software to begin with. As you get to grips with what services and features you need, you can upgrade accordingly. Check out HMRC’s list of free Payroll software.

If you’re in the process of choosing a solution for your business payroll we can help. Give our friendly team at Buzz a call on 0117 370 6270 and we can give you some advice on what you might need, how to get started and save you some time!