Guide

Payroll software

Choosing a payroll software supplier

Payroll software is complex and it is essential that you choose a dependable supplier. You will want to choose a supplier who is successful, financially viable and can provide excellent references.

HM Revenue & Customs (HMRC) accredited software

When choosing a new payroll software, you should ensure that it is accredited under the HMRC Payroll Standard Accreditation Scheme. This scheme covers accreditation in:

  • calculation of tax and National Insurance contributions
  • electronic exchange of HMRC returns and payments
  • customer service
  • handling of statutory records, credits and deductions

The Scheme is updated regularly and all software packages are tested annually to ensure that they remain compliant with current legislation.

See more on registering and getting started with PAYE.

Electronic filing

Most employers now have to file end-of-year and in-year returns online. Electronic filing of HMRC returns and payments saves time and trouble. Suppliers should provide electronic filing for all forms that must be filed electronically.

Payroll software costs and updates

As well as the purchase costs, you should also consider costs in operating, supporting and updating the software. You will have to pay an annual subscription for updates on rates and legislation changes. Check how much the subscription costs, and how and when you will get access to updates.

Find out how long the supplier continues to provide updates. Some suppliers only provide updates for a few years, so you may need to upgrade to a newer version of the software.

Some suppliers have experienced problems with updates introducing bugs that haven't been caught by testing. Check that, when updates are applied, you can roll them back in the event of any problems.

Payroll software support

Because of the critical nature of payroll operations, excellent support is a must. If a software problem occurs on payday, you must be able to resolve it immediately. Check the levels of support your supplier offers, as well as the associated cost and response times.

See how to choose an IT supplier for your business.