HOW TO HIRE · BUSINESS & PROFESSIONAL

How to hire payroll service in the UK
The checks, the questions and the paperwork.

Payroll needs no licence, but your employer duties stay with you and bureaux must register with HMRC. Here are the checks.

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THE 60-SECOND VERSION

Hiring payroll service in five steps

  1. Register as an employer firstBefore the first payday, so you have a PAYE reference.
  2. Check the bureau's HMRC registrationPayroll-only providers must register for an agent services account from 18 November 2026.
  3. Confirm pension duties are coveredAuto-enrolment assessments, contributions and declarations.
  4. Agree how changes reach the bureauStarters, leavers, pay rises and sickness, with a cut-off date each month.
  5. Check data securityPayroll records hold bank details and National Insurance numbers.

BEFORE YOU BOOK

Check before you book

No register applies

No licence is required to run payroll for others in any UK nation. The legal duties are HMRC registration for providers dealing with HMRC, anti-money-laundering supervision for accountancy firms, and data protection.

Ask the payroll service which body, if any, supervises it and how long it has run payrolls of your size. gov.uk →

HMRC tax adviser registration for payroll providers

According to HMRC, a business that runs payroll for other employers counts as a tax adviser and must hold an agent services account from 18 November 2026.

Ask whether the bureau has, or is applying for, an agent services account. gov.uk →

Your PAYE reporting duty

As an employer operating PAYE you must report pay and deductions to HMRC through payroll on or before each payday. Using a payroll service does not move the duty off you.

Ask for a copy of each submission confirmation. gov.uk →

Workplace pension duties

Under the workplace pension rules every employer must offer a scheme to eligible staff from their duties start date and enrol those who meet the age and earnings tests; the payroll service only carries out the steps for you.

Check the payroll service assesses staff and sends contributions every pay period. gov.uk →

VAT

Payroll bureau services are standard-rated, so a registered payroll provider adds 20% to the price per employee per pay run and to extras such as holiday calculations. Registration becomes compulsory once a payroll provider has VAT-taxable turnover over £90,000 in any rolling 12 months; from then VAT must be charged and shown as a separate line on the invoice.

Ask the payroll provider for the VAT number with the agreement and for the per-payslip fee and VAT shown apart. gov.uk →

“Is your payroll service registered with HMRC as a tax adviser?”

A good answer: An agent services account, or registration by 18 November 2026.

“What does the per-employee payroll price include?”

A good answer: Payslips, submissions to HMRC, pensions, starters and leavers, year-end forms.

“How do you handle workplace pension duties?”

A good answer: Assessment, enrolment, contributions and the declaration of compliance.

“What is the monthly cut-off for changes?”

A good answer: A date and a simple way to send changes.

“How is payroll data protected?”

A good answer: Encryption, access controls and where data is stored.

“What happens if a payroll submission is late or wrong?”

A good answer: Who fixes it and who pays any penalty caused by the bureau.

“Is there a minimum monthly fee?”

A good answer: A stated minimum for small teams.

Getting the quote right

  • Price per employee per pay run, and pay frequency
  • Who actually attends to your pay runs: the payroll provider's employed staff, or a subcontracted bureau
  • Minimum monthly fee
  • Pensions, starters, leavers and year-end included
  • Extras: director payroll, expenses, holiday calculations
  • Data security and who corrects errors
  • The VAT number, and VAT at 20% on the per-payslip fee and the minimum monthly fee

Walk away if

  • No plan to register with HMRC
  • Pension contributions left to you without saying so
  • Payslips sent by unsecured email
  • No error correction terms
  • Changes accepted by phone only
  • No submission confirmations
LOW
£4
TYPICAL
£8
HIGH
£12

What payroll service costs: £4–£12 per employee

Payroll services usually charge per employee per pay run, often with a monthly minimum. Payroll Service price guide →

Guide prices compiled by the Locufy team from published Irish and UK provider price lists and 2026/27 cost guides. Updated 2026.

KNOW WHAT TO LOOK FOR? NOW FIND ONE

Payroll bureaux near you, with the badges that matter shown

ID checked, trader status and one score from every review — on the card, before you message anyone. Nearest first. No account needed to look.

Or post the job free and let them come to you.

  1. SetupEmployer registration, staff details and pension scheme connected.
  2. ChangesStarters, leavers and pay changes sent by the cut-off.
  3. Pay runPay, tax, National Insurance and deductions calculated.
  4. ReportingPayroll reported to HMRC on or before payday; pension contributions sent.
  5. Year endP60s issued and records closed.

PAYE
Pay As You Earn: the system for deducting tax from wages.
FPS
Full Payment Submission: the report sent to HMRC each payday.
Auto-enrolment
Putting eligible staff into a workplace pension automatically.
P60
The end-of-year summary of pay and tax given to each employee.
Payroll bureau
A firm that runs payroll for other businesses.
Duties start date
When an employer's pension duties begin.

AFTER

When the job is done

Check the first payslipsPay, tax code, National Insurance and pension deductions for each person.
Match HMRC's recordsCompare what HMRC shows with what you paid.
Keep payroll recordsPayslips, submissions and pension records, kept securely.
Rate the workA few honest lines about the payroll bureau help other people decide. If you are unhappy, start the make-it-right step and give them the chance to fix it.

STEP 1Raise it with the payroll bureauWrite down what you expected from the payroll bureau and what you actually received, and send it. Under section 49 of the Consumer Rights Act 2015 the job needed reasonable care and skill; if it lacked them, sections 55 and 56 let you ask for it redone or for a refund of part of the price.
STEP 2Ask Locufy to help put it rightAny score below four stars opens the make-it-right step: the payroll bureau hears about the problem first, and we follow it through before the review appears.
STEP 3HMRC and the pensions dutyA payroll error is yours to correct with HMRC, so raise it with the payroll service at once. If the provider belongs to a professional body, complain to it about conduct. Consumer advice: Citizens Advice 0808 223 1133, Advice Direct Scotland 0808 800 9060, Consumerline 0300 123 6262.
STEP 4Small claims courtA claim against the payroll bureau can go, without a solicitor, to the small claims track in England and Wales (up to £10,000), simple procedure in Scotland (up to £5,000) or the small claims court in Northern Ireland (up to £5,000).

Hiring payroll service: questions people ask

Yes: HMRC says third-party payroll providers will need to register as tax advisers from 18 November 2026.

Yes. You remain the employer, responsible for PAYE reporting and workplace pension duties.

No licence is needed, but HMRC registration and data protection rules apply.

Roughly £4–£12 per employee, typically £8. Headcount, pay frequency, pensions and minimum fees for small teams set the price. The payroll service price guide shows what sits behind each figure; type your town above to find payroll bureaux in your area.

Enrolling eligible staff into a workplace pension and paying employer contributions.

A few days; then each pay run is handled to your pay date.

MORE GUIDES

More hiring guides in business & professional

How to hire: AccountantHow to hire: BookkeeperHow to hire: HR ConsultantHow to hire: VAT ReturnsHow to hire: Tax AdvisorHow to hire: Recruitment AgencyHow to hire: Company Formation ServiceHow to hire: Self-Assessment HelpAll 701 hiring guides →

Payroll bureaux near you

Payroll bureaux in LondonPayroll bureaux in ManchesterPayroll bureaux in BirminghamPayroll bureaux in GlasgowPayroll bureaux in BelfastAll payroll bureaux on Locufy →

Sources — checked October 2026

  1. gov.uk — check if and when you need to register as a tax adviser with HMRC
  2. gov.uk — running payroll
  3. gov.uk — workplace pensions for employers
  4. gov.uk — Money Laundering Regulations: who needs to register
  5. Consumer Rights Act 2015, section 49 — reasonable care and skill
  6. Citizens Advice — more help with a consumer issue
  7. gov.uk — make a court claim for money: court fees
  8. VAT rates — VAT rates for goods and services: standard rate 20% on most goods and services
  9. GOV.UK — Register for VAT: when to register