Who this guide is for
If you’re a UK service SME with 5–30+ staff (or a landlord with a small payroll), this page answers the buying questions: what exactly gets done, what it costs, which dates matter, and how you avoid penalties. Plain English, zero fluff, so you can decide whether to keep payroll in-house or hand it to a specialist who’ll protect your brand and cashflow.
What’s included in outsourced payroll services
A high-quality bureau should cover these blocks, with named ownership and clear SLAs.
1) Core run & HMRC submissions (RTI)
- Gross-to-net calculations (basic pay, overtime, statutory pay, student loans, AEOs)
- FPS filed on or before payday (GOV.UK)
- EPS filed by the 19th of the following tax month where adjustments are needed (GOV.UK)
2) Payments & documents
- ePayslips or sealed payslips; P45 for leavers; end-of-year P60 for everyone employed on 5 April (must be issued by 31 May, GOV.UK)
- Optional BACS/payment files for net pay and HMRC remittances
3) Year-end & benefits
- P11D/P11D(b) preparation and submission by 6 July; calculate and guide payment of Class 1A NIC (due 22 July electronically; 19th by post) — see HMRC deadlines (GOV.UK) and Class 1A payment page (GOV.UK)
- PAYE Settlement Agreement (PSA) support; tax & Class 1B NIC payment due 22 October electronically; 19th by post (GOV.UK)
4) Pensions (automatic enrolment)
- Assessments each pay run, enrolments/postponements, opt-outs/opt-ins
- Contribution files to the scheme; re-enrolment every 3 years and re-declaration within 5 months of the 3rd anniversary (The Pensions Regulator)
- Maintain at least the 8% total minimum (with 3% employer minimum) (TPR)
5) Optional add-ons
Holiday pay calculation (incl. variable hours), CIS verification & returns, GL journals, employee portals, manager self-service, HR letters, and integrations (e.g. Xero/QuickBooks/ERP).
Internal reads you’ll see throughout:
• Director Pay Guide
• Employment Allowance Explained 2025/26
• NIC, PAYE & Pension Costs
• Cashflow Forecasting Services
How UK payroll pricing works (and what “good” looks like)
Common pricing models
- Per payslip (typical for weekly payrolls or smaller teams)
- PEPM (per employee, per month) (typical for monthly payrolls)
- Setup/onboarding, pensions AE setup, year-end (P60/P11D), journals, extra runs, and HR support are often separately priced.
Typical 2025 ranges for SMEs (guide, not a quote)
- Per-payslip: ~£5–£20 (examples & guides vary)
- Per Employee, Per Month (PEPM): ~£4–£10 for fully-managed basics (size, scope and SLAs move the price)
- Real bureau examples: standing charge + per-employee fees are common (e.g., £34 + £6.75/employee/month, £30 + £3.70/employee/month)
What pushes price up or down?
Pay frequency (weekly ≫ monthly), headcount, starters/leavers volume, variable pay complexity, benefits/P11Ds, pension files, journals/integrations, and SLA/response times.
Buyer’s checklist (high-value focus): clear scope; named manager + escalation; RTI timeliness stats; ISO-grade data security; exit terms & data pack; sync with your finance calendar (we bake PAYE 22nd and pensions into your 52-week forecast).
If you’re mainly price-shopping, you’ll find cheaper. If you want accuracy, accountability and cash-control, choose a team that publishes SLAs, audits “on-or-before” filings, and integrates with your cash calendar.
Key compliance dates you cannot miss (2025/26)
- PAYE/NIC payments: 22nd of the next tax month (electronic) or 19th by post; quarterly payers: 22nd after the quarter (e.g., 22 July for Apr–Jun) GOV.UK, GOV.UK.
- RTI FPS: on or before payday; EPS: by the 19th following the tax month when due GOV.UK, GOV.UK.
- P60 to employees: by 31 May GOV.UK.
- P11D/P11D(b): by 6 July; Class 1A NIC paid by 22 July (19th post) GOV.UK, GOV.UK.
- PSA payment: 22 October (19th post) GOV.UK.
- Auto-enrolment re-enrolment: every 3 years; re-declaration within 5 months The Pensions Regulator.
Quick compliance calendar (2025/26)
| Task | When | Why it matters |
|---|---|---|
| FPS | On or before payday (HMRC) | Avoid late-filing penalties; keep tax codes in sync. GOV.UK |
| EPS (if needed) | By the 19th after month-end (HMRC) | Ensures HMRC credits (statutory, EA, CIS suffered) are applied. GOV.UK |
| PAYE/NIC payment | Monthly: by the 22nd electronic (HMRC) | Miss it and interest/penalties accrue. GOV.UK |
| Quarterly PAYE | 22 July / 22 Oct / 22 Jan / 22 Apr (HMRC) | Smoother cash for small schemes. GOV.UK |
| P60 to staff | By 31 May (HMRC) | Legal employee communication. GOV.UK |
| P11D & P11D(b) | By 6 July (HMRC) | Confirms benefits; creates Class 1A bill. GOV.UK |
| Class 1A NIC payment | By 22 July (HMRC) | 15% on benefits-in-kind. GOV.UK |
| PSA payment | By 22 October (HMRC) | Tidies minor/irregular benefits centrally. GOV.UK |
| AE re-enrolment | Every 3 years (TPR) | Don’t miss the re-declaration window. The Pensions Regulator |
We’ll embed these into your 52-week forecast so payroll, PAYE and pension cash never collide with VAT or supplier runs. See: Cashflow Forecasting Services.
2025/26 payroll costs to budget for (NIC, PAYE & pensions)
Employer NIC (Class 1 Secondary)
From 6 April 2025, employers pay 15% on earnings above the Secondary Threshold, which for 2025/26 is £96/week (£417/month; £5,000/year) see HMRC’s Rates and thresholds for employers 2025 to 2026 (GOV.UK).
Employment Allowance (EA)
Eligible employers can offset up to £10,500 of their employers’ Class 1 NIC liability in 2025/26. Claim through EPS and apply from the start of the year see Employment Allowance section on the same HMRC page (GOV.UK).
→ Deep-dive: Employment Allowance Explained 2025/26
Benefits (Class 1A/1B NIC)
Class 1A and 1B NIC rates are 15% for 2025/26 deadlines above; rates confirmed here (GOV.UK).
Auto-enrolment minimums
The legal minimum remains 8% total qualifying earnings (at least 3% employer) see TPR guidance The Pensions Regulator.
→ Cost modelling: NIC, PAYE & Pension Costs
RTI in practice: starters, leavers and “on-or-before”
- Starting without a P45? Use HMRC’s Starter Checklist to set the correct tax code and student loan flag (GOV.UK) and follow the FPS on-or-before rule (GOV.UK).
- Leavers: include the leaving date on the FPS and give the P45 promptly (GOV.UK).
- Late filing/payment: HMRC may not charge a penalty for very minor first failures, but persistent lateness or late payment attracts penalties/interest (see paying HMRC page: due by the 22nd electronic) (GOV.UK).
Directors have unique RTI nuances (annual earnings period, NI calculation method). See our Director Pay Guide for salary/dividend planning and step-by-step payroll setup.
In-house vs outsourced: cost, time and risk (12-employee monthly payroll)
| Factor | In-house | Outsourced bureau |
|---|---|---|
| Time per month | 6–10 hrs (data prep, RTI, AE file, payments, tickets) | 1–2 hrs (approve & review exceptions) |
| Accuracy & timeliness | Depends on one person & cover | SLA-driven, dual-control checks |
| Compliance | You chase dates & updates | We track FPS/EPS, 22nd PAYE, P60/P11D/PSA |
| Cash control | Manual | HMRC cash-outs baked into your 52-week forecast |
| Cost | Software + staff time + cover | Transparent per-payslip/PEPM + clear add-ons (AE, journals, HR) |
If payroll errors would damage staff trust or your brand, cheap is expensive. Buy accuracy, cover and cadence, then judge providers on RTI timeliness, exception handling and how well they sync with your cash calendar.
Book a 20-minute planning call
What you’ll get with Heights (scope & SLAs)
- We run it, sign it, and stand behind it.
- Scope: gross-to-net, FPS on-or-before, EPS when due, ePayslips, P45s, P60s, AE assessments & files, journals to your GL, year-end (P11D/P11D(b)), and compliance calendar management. (PSA support available.)
- SLAs: on-or-before filing ≥99.5%; query first response within 1 business day; named payroll manager; escalation route to director.
- What we don’t do: HR disputes or legal advice (we’ll coordinate with your HR/legal partner).
FAQs
How much does outsourced payroll cost per employee?
Guides and bureau examples suggest ~£4–£10 Per Employee, Per Month (PEPM) for fully-managed basics; per-payslip models often land ~£5–£20 depending on scope/frequency. Always confirm inclusions (AE, journals, BACS, year-end).
When do I pay PAYE/NIC to HMRC?
Monthly: by the 22nd of the next tax month (electronic), or the 19th by post. Quarterly: by the 22nd after the quarter. GOV.UK
What is RTI and when are FPS/EPS due?
RTI is real-time reporting: FPS on or before payday; EPS by the 19th after the month (when due). GOV.UK
What are the 2025/26 employer NIC changes?
Employer (secondary) Class 1 NIC is 15% above the Secondary Threshold £96/week (£417/month; £5,000/year); Employment Allowance £10,500; Class 1A/1B 15%. GOV.UK
Next steps (and smart internal reads)
- Planning director pay the right way? → Director Pay Guide
- Can you claim the Employment Allowance? → Employment Allowance Explained 2025/26
- Want the full budget impact by headcount? → NIC, PAYE & Pension Costs
- Make payroll cash totally predictable → Cashflow Forecasting Services