UK fee benchmark
How much does payroll cost per employee in the UK?
Base fee plus per employee
£15–£35 + £5
Per month, per employee per pay run
What you should expect to pay
| Service | Typical fee | Notes |
|---|---|---|
| Base payroll fee | £15–£35/mo | RTI submissions, payslips, HMRC filings |
| Per employee | ~£5/employee | Each employee, each pay run |
| 5 employees, monthly payroll | £40–£60/mo | Typical small employer |
| Limited company with payroll, annually | £2,160–£4,320/yr | Accounts, tax, and payroll combined |
Editorial benchmarks from Pick My Accountant's UK market research — indicative ranges, not quotes.How we set them.
Weekly payroll costs roughly four times monthly
Per-employee fees are charged per pay run, so weekly payroll multiplies the cost. If your sector allows it, moving from weekly to monthly pay is usually the single biggest payroll saving available — and it reduces the number of RTI submissions where something can go wrong.
What should be included
A complete service covers RTI Full Payment Submissions on or before each payday, payslips, starters and leavers with P45s, statutory pay (sick, maternity, paternity), auto-enrolment assessment and pension file uploads, P60s at year end, and P11D benefits reporting where relevant. Pension re-enrolment every three years and P11Ds are the two most commonly excluded extras — ask specifically.
The cost of getting it wrong
Late RTI submissions attract penalties from £100 a month, and National Minimum Wage errors are enforced with public naming. Auto-enrolment breaches carry fixed penalties of £400 plus daily escalation. Against those numbers, outsourced payroll for a handful of staff is inexpensive insurance.
Frequently asked questions
How much does payroll cost per employee in the UK?
Outsourced payroll typically costs £15–£35 a month base plus around £5 per employee per pay run. Five employees on monthly pay works out around £40–£60 a month.
Is outsourcing payroll cheaper than doing it in-house?
For under roughly 10 employees, outsourcing is usually cheaper once software licences and staff time are counted — and it moves compliance risk to a specialist. Larger employers often bring it in-house with dedicated software.
Does payroll include auto-enrolment pensions?
Usually assessment and pension file uploads are included, but three-yearly re-enrolment and scheme setup are often charged separately. Confirm both before signing.
Figures are indicative editorial benchmarks for UK small businesses, not quotes or financial advice. Actual fees depend on turnover, transaction volume, record quality, and scope — always confirm directly with the firm. Last reviewed: 2026-07-17.