--- description: Payroll management is an essential part of any UK business but compliance with HMRC is crucial. Discover 4 of the best choices approved by the tax authorities. image: https://gdm-localsites-assets-gfprod.imgix.net/images/software_advice/og_logo-55146305bbe7b450bea05c18e9be9c9a.png title: The 4 best UK payroll software approved by HMRC --- # 4 of the best HMRC-recommended payroll software in the UK Canonical: https://www.softwareadvice.co.uk/blog/2818/best-payroll-software-uk-recommended-hmrc Published on 29/06/2022 | Written by David Jani. ![4 of the best HMRC-recommended payroll software in the UK](https://images.ctfassets.net/63bmaubptoky/ELkfgNd6DWmsifzo8ofOFFrm6Pe4B-NPwyNr4PK-LFk/093e10a0619e927248575d1a7da79227/Payroll-Software-Tool-List-UK-Software-Advice-Header.png) > Companies use payroll software to simplify one of their most important tasks, paying their staff. Keeping on top of a company payroll is essential for a well-functioning business so choosing the right tools for the job is crucial. ----- ## Article Content Companies use payroll software to simplify one of their most important tasks, paying their staff. Keeping on top of a company payroll is essential for a well-functioning business so choosing the right tools for the job is crucial.In this article1. Quickbooks Payroll2. Workday HCM3. Xero4. Dayforce HCMChoosing a provider that is compliant with HMRC and PAYE is a key consideration for owners and founders when looking for a small business payroll solution . The UK government lists many payroll software options on its own website that meet these standards but doesn’t provide actual information on which is the best payroll software for UK SMEs.How does payroll software work?Payroll software makes it easier for companies to manage the payment of wages to their staff. It allows human resources (HR) teams to manage, calculate, and customise wages and paid time off (PTO). It also creates a centralised location to manage staff data and keep on top of staffing costs.Common features:– Benefits management– Payroll management– Payroll reporting– Tax compliance– Vacation/leave trackingTo help narrow down this choice for UK SMEs we have picked 4 of the best payroll options for small businesses that HMRC themselves have recognised. To do this we have used our own user ratings to highlight the top performers in this field according to customers. To be featured on our list, businesses had to:Appear on HMRC’s list of recognised payroll softwareMeet our definition for payroll software: “Payroll software automates the process of managing employee salaries, wages, bonuses, and deductions.”Have received at least 20 published reviews on Software Advice between 06/06/2020 – 06/06/2022Achieve an average overall rating of at least 4.2/5Our full methodology can be viewed at the bottom of the page.1. Quickbooks PayrollQuickbooks payroll portal showing company employees and contractors (source)Value for money: 4.3/5Functionality: 4.5/5Ease of use: 4.4/5Customer support: 4.3/5Quickbooks is an all-in-one accounting platform that features an HMRC compliant payroll add-on for large, small, and sole tradership businesses. It includes a number of features that help companies calculate important data such as tax submissions, statutory payments, pensions, and contractor costs. It can also be used to generate payslips automatically, and issue payments to recipients on a set, regular basis. The payroll system also connects with the main Quickbooks accounting system in the case of users already registered for its services.Before buying, users can access a 30-day trial of the Quickbooks software. To use it on a more permanent basis it is necessary to purchase one of its subscription plans and pick one of its payroll add-on options.The Standard Payroll option includes elements such as weekly or monthly employee payments, pension submissions to Nest, payslips, and calculations for statutory sick and maternity pay. Advanced Payroll, however, includes all the features of the standard option plus timesheets and allows more flexibility to pay staff at different frequencies, calculate statutory payments and make pension submissions to five pension providers.   Read more2. Workday HCMWorkday HCM’s Dashboard (source)Value for money: 4.2/5Functionality: 4.3/5Ease of use: 4.2/5Customer support: 4.2/5Workday Human Capital Management (HCM) features a complete payroll function in addition to its many other main tools such as talent search, job profiles, and employee data management. Despite providing a detailed system often used by larger companies, it can work well as a small business payroll software due to its flexibility, especially for those that are scaling up fast. It also features a dedicated team to help users in the UK manage payroll whilst following the most up-to-date regulations. Additionally, Workday HCM’s payroll tool provides ways to visualise data in real-time, customise audits, and complete and publish P60 forms from the app. The system does not offer a free version or trial. For further information and pricing details, prospective clients should contact Workday directly.Read more3. XeroPayroll feature tab in Xero’s UI (source)Value for money: 4.2/5Functionality: 4.2/5Ease of use: 4.3/5Customer support: 3.9/5Xero is an accounting software platform that also features HMRC recognised payroll functions. Its system is designed to cater especially to smaller businesses, such as those that are in industries such as construction, farming, manufacturing and hospitality, amongst others.The payroll add-on can be used on any device and allows users to handle a number of important tasks such as tracking time, paid leave, and pensions. It also guides businesses in what data needs to be reported to the tax authorities and calculates statutory sick pay based on the most up-to-date legislation by the government.   Xero allows prospective clients to sign up for a 30-day trial before committing to a purchase. For those that decide to upgrade, there are three possible pricing tiers to choose from. The initial Starter tier is aimed at newer, smaller businesses and includes accounting basics such as entering bills, reconciling transactions, and submitting VAT returns to HMRC. The Standard plan includes the ability to perform tasks such as bulk reconciliations and, finally, the Premium plan adds further features such as the ability to use multiple currencies.The payroll processing functionality can then be added-on to whichever package is chosen for an additional fee. This initially allows users to manage 5 employees through the portal, although other individual staff members can also be added on for an extra cost.  Read more4. Dayforce HCM Dayforce HCM payroll dashboard (source)Value for money: 4.0/5Functionality: 4.2/5Ease of use: 4.1/5Customer support: 3.8/5Dayforce HCM, by Ceridian, is an enterprise human capital management system which businesses can utilise to centralise their payroll and accounting in one place.Its payroll manager toolset boasts a number of features that can help companies maintain their tax compliance with the most current workplace legislation, calculate payroll costs, and consolidate worker data in a single location. The tools include secure databases, real-time updates as new information is input into the system, and grid views to show employers’ staff stats in a visual manner. This data can also be shared with staff via the app and web portal, so they have a complete picture of their payment schedule and benefits too.  The company doesn’t offer a simplified free version or a trial period, so it isn’t possible to use Dayforce HCM payroll software for free . Instead, prospective clients can request a demo from Dayforce before making a purchase. For pricing information, please contact the vendor directly. Read more Looking for payroll software? Check out our catalogue. ## Disclaimer > MethodologyTo be considered for this report, products had to:1. Be featured on the UK Government’s list of recognised payroll software which features free and paid-for software recognised by HMRC that you can use to report PAYE information online.2. Meet our definition for payroll software :“Payroll software automates the process of managing employee salaries, wages, bonuses, and deductions. It also tracks time off, vacation accrual, and benefits, and enables users to factor in these to calculate payroll amounts. In short, you know exactly how much amount needs to be deposited to each of the employee’s accounts, and you are also able to automatically remit it.”3. Have the following features:Payroll managementPayroll reportingTax compliance4. Have 20 or more verified user reviews published between 06/06/2020 – 06/06/20225. Have an average user rating of at least 4.2 out of 5 stars by Software Advice users for inclusion in this list. ## About the author ### David Jani David is a Content Analyst for the UK, providing key insights into tech, software and business trends for SMEs. Cardiff University graduate. He loves traveling, cooking and F1. ## Related Software - [QuickBooks Payroll](https://www.softwareadvice.co.uk/software/5300/quickbooks-payroll) — 4.5/5 (980 reviews) - [Xero](https://www.softwareadvice.co.uk/software/2976/xero) — 4.4/5 (3281 reviews) - [Dayforce HCM](https://www.softwareadvice.co.uk/software/4592/dayforce-hcm) — 4.3/5 (1056 reviews) ## Related Categories - [Accounts Payable Software](https://www.softwareadvice.co.uk/directory/1851/accounts-payable/software) - [Accounts Receivable Software](https://www.softwareadvice.co.uk/directory/1843/accounts-receivable/software) - [Billing and Invoicing Software](https://www.softwareadvice.co.uk/directory/263/billing-invoicing-software/software) - [Budgeting Software](https://www.softwareadvice.co.uk/directory/265/budgeting-forecasting-software/software) - [Onboarding Software](https://www.softwareadvice.co.uk/directory/1396/employee-onboarding/software) ## Related Articles - [What is FinTech and how it is shaping the future of banking](https://www.softwareadvice.co.uk/blog/3262/what-is-fintech-uk) - [Top 3 CRM systems for small businesses in the UK](https://www.softwareadvice.co.uk/blog/3190/top-crm-software-uk) - [Cyber security at SMEs part 2: Beyond the technical defences](https://www.softwareadvice.co.uk/blog/2524/cyber-security-threats-smes) - [Employee monitoring tools: Managers are happy with them but recognise challenges](https://www.softwareadvice.co.uk/blog/3491/managers-employee-monitoring-software) - [The subscription business model: Which products appeal to UK online shoppers?](https://www.softwareadvice.co.uk/blog/3114/subscription-business-model-most-popular-products) ## Links - [View on SoftwareAdvice](https://www.softwareadvice.co.uk/blog/2818/best-payroll-software-uk-recommended-hmrc) - [Blog](https://www.softwareadvice.co.uk/blog) - [Home](https://www.softwareadvice.co.uk/) ----- ## Structured Data