Payroll Solutions for Small Businesses

 30 Aug 2018

All businesses, regardless of how many employees should operate a formal payroll. But when you’re a small business and you can count all your employees, on one hand, it can be tempting to keep things streamlined by issuing payment on an almost cash-in-hand basis. However, this type of operation leaves both business and employees are at risk of not upholding HMRC regulations.

The best format to undertake your payroll responsibilities will be to impose a PAYE basis and prepare yourself to organise the legal introduction of auto-enrolment in workplace pensions. Furthermore, complicated by deductions such as Student Loan subtractions and salary sacrifices for company benefits, it can suddenly become an overwhelming and time-consuming task. Let’s not forget that as a small business owner, you’ll also be completing your day-to-day commitments for the business.

What payroll solutions are there for small businesses?

As the business owner, you’ll have to decide how you want to complete all your payroll obligations. There are several solutions which vary in their involvements required by you and associated costs; in-house, outsourcing and fully-managed services.


Keeping your payroll in-house will involve either the business owner or a qualified employee to manage the payroll. Commonly this will require access to all employee salary details and their individual tax commitments. This solution will also require the business to involve some degree of Human Resources when considering holiday and sickness tracking or obligations. 

Even though keeping your payroll in-house, when you’re a small business owner, sometime’s the cost of employing a qualified individual may become more costly in comparison to alternatives, especially when you’re still accounting for a small team. Otherwise, can you justify consuming your time with payroll tasks on top of driving your business forward? That’s without considering the time to learn the processes to ensure you don’t encounter any complications or heavy fines.


An outsourcing solution is utilising a third party provider to fulfil all your payroll requirements which are becoming a more popular solution for small business owners. These professional payroll companies are able to take care of all your payroll and auto-enrollment responsibilities, relying on their experience and qualifications to provide a seamless service. The biggest benefit for outsourcing your payroll is the removal of having to process any aspect of payroll and at a cost-effective value, you’ll notice that this option provides you with the ability to focus on important business aspects. Furthermore, utilising qualified professionals means that there’s a significant reduction in the risk of any problems or fines being incurred. These providers will also take care of epayslips, end of year reports, and all the administration which comes with payroll.


Fully-managed payroll is a different type of outsourcing, whereby the external company will take all elements of payroll and operate as an extension of your business. This type of outsourcing is hugely popular with larger companies where turnover can be large and the admin behind their payroll can be extremely complex. It is commonly advised that a business that does not utilise the services or employ a bookkeeper should look into a fully-managed provider. In essence, a fully managed provider will perform very similar services as an outsourcing payroll company. The key benefit of using a fully-managed provider is similar to outsourcing whereby professionals provide the reassurance that every aspect of your payroll is complex perfectly and abides by all regulations.


Even though the differences between a fully-managed and outsourcing are very minor, they do have their own benefits. That’s why we have entwined the benefits from both service types into one provider to give small business owners the best experience for passing their payroll to a third party. The main decision as a small business owner is to choose whether you want to keep the obligations in-house by completing them yourself or employing a qualified individual, whereas alternatively, you could use a payroll company which offers high-quality payroll at cost-effective prices.