TL;DR: Payroll outsourcing in the UK usually costs £4 to £25 per employee per month and offers significant cost savings versus managing payroll internally. PEPM pricing is the most common model, with additional charges for CIS and complex payroll structures. White-label payroll services enable accountancy firms to scale profitably while ensuring compliance with HMRC and auto-enrolment requirements.
Managing payroll in-house consumes time, demands specialist knowledge, and exposes businesses to costly penalties if mistakes creep in. It’s no wonder that payroll outsourcing has become a strategic priority for UK businesses and accountancy firms alike. With cost per click values ranging from £8.54 to £10.64 for payroll outsourcing searches, it’s clear that decision-makers are actively evaluating their options right now.
The UK payroll landscape in 2025 is shaped by increasingly complex compliance requirements including Real Time Information (RTI) submissions, Making Tax Digital, auto-enrolment pension contributions, and Construction Industry Scheme (CIS) regulations. For many businesses, outsourcing payroll isn’t just about saving money, it’s about de-risking operations and freeing up internal resources for higher-value work.
Yet pricing transparency remains elusive. Most providers obscure their fees behind “request a quote” forms, and many articles focus on US pricing models that don’t translate to the UK market. This comprehensive guide cuts through the confusion, providing detailed 2025 UK payroll outsourcing costs so you can budget accurately, calculate ROI, and select the right partner for your needs.
What this guide covers
- Pricing models explained: Per-employee-per-month (PEPM), per-payslip, fixed monthly fees, and full-time equivalent (FTE) models
- Cost by employee count: Detailed pricing tables for businesses from 1 to 100+ employees
- PAYE vs CIS pricing: How Construction Industry Scheme adds to costs
- In-house vs outsourced ROI: Full cost breakdown including salary, NI, pension, and software for payroll managers
- Hidden fees and add-ons: Setup charges, pension administration, year-end reporting, BACS fees
- White-label payroll for accountants: Reseller margins and profitability models
- 2025 compliance costs: MTD, RTI, auto-enrolment and their pricing impact
- Provider comparison: Freelancers vs bureaus vs hybrid offshore models
Whether you’re an accountancy practice seeking profitable white-label payroll solutions or a finance director weighing the true cost of keeping payroll in-house, this 5,000-word guide provides the data-driven clarity you need.
Understanding UK payroll outsourcing pricing models
UK payroll providers use several distinct pricing structures. Understanding the mechanics of each helps you identify which model aligns with your headcount, pay frequency, and budget predictability requirements.
Per-employee-per-month (PEPM) pricing
Per-employee-per-month is the industry’s dominant model. Providers charge a set fee for each employee on your payroll, typically ranging from £4 to £25 per employee per month depending on service level.
Typical PEPM bands:
- Basic payroll only: £4-£6 per employee (payslip generation, RTI submission, basic support)
- Standard managed payroll: £6-£10 per employee (includes auto-enrolment administration, year-end reporting, dedicated support)
- Fully managed payroll: £12-£25 per employee (comprehensive service including pension scheme liaison, P11D processing, BACS payment handling, HR integration)
PEPM works well for businesses with stable or growing headcounts. Costs scale automatically as you hire, and providers often offer volume discounts once you exceed 25-50 employees.
Per-payslip pricing
Some providers charge per payslip processed rather than per employee per month. Typical per-payslip costs range from £2 to £6, with monthly runs usually sitting around £3-£5 and weekly runs commanding a small premium.
This model suits businesses where employee numbers fluctuate significantly (seasonal hospitality, construction with variable subcontractor counts) or where you only process payroll for a subset of your workforce each period.
Example calculation:
- 15 employees on monthly payroll
- Per-payslip rate: £4
- Monthly cost: 15 × £4 = £60
- Annual cost: £60 × 12 = £720
The per-payslip model becomes more expensive than PEPM once you’re running payroll for the same group every period, but offers flexibility for irregular payment patterns.
Fixed monthly fee
Fixed monthly fees bundle all payroll activity into a single predictable charge, regardless of how many pay runs you process. This typically works best for micro-businesses (1-5 employees) or organisations with very simple payroll requirements.
Typical fixed monthly fees:
- 1-5 employees (monthly payroll): £25-£60 per month
- 6-10 employees (monthly payroll): £50-£100 per month
- 10-25 employees (monthly payroll): £75-£250 per month
Fixed fees provide excellent budget certainty but may include caps on amendments, off-cycle runs, and starters/leavers. Always clarify what’s included and what triggers additional charges.
Full-time equivalent (FTE) model
For larger accountancy practices or businesses needing dedicated payroll capacity, some providers offer a full-time equivalent model where you essentially “rent” a payroll specialist (or team) who works exclusively on your accounts.
Typical FTE costs:
- Offshore FTE (with UK supervision): £1,600-£2,200 per month
- UK-based FTE: £3,500-£4,500 per month (equivalent to £42k-£54k annually, which is market rate for a payroll administrator)
The FTE model works for firms processing 500+ payslips monthly across multiple client ledgers or businesses with exceptionally complex multi-entity, multi-jurisdiction payroll needs.
Pricing models comparison
Pricing model | Typical range | Best for | Pros | Cons |
Per-employee-per-month (PEPM) | £4-£25/employee/month | Most businesses with steady headcount | Scales automatically, predictable, volume discounts available | Can be costly for very large teams without negotiation |
Per-payslip | £2-£6/payslip | Seasonal businesses, fluctuating headcount | Pay only for active employees each period | Becomes expensive if running full payroll every time |
Fixed monthly fee | £25-£250/month | Micro-businesses (1-25 employees) | Excellent budget certainty | May have caps on changes; not scalable for growth |
Full-time equivalent (FTE) | £1,600-£4,500/month | Large firms, complex multi-client payroll | Dedicated capacity, deep integration | Expensive; only viable at scale (500+ payslips/month) |
UK payroll outsourcing costs by employee count (2025 pricing data)
Not all payrolls are equal. Costs depend heavily on headcount, pay frequency, and service level. Below are benchmark costs for fully managed payroll services in 2025, incorporating RTI submissions, basic pension administration, year-end reporting, and standard support.
Employee count | Monthly cost (PEPM model) | Monthly cost (fixed fee model) | Annual cost | What’s typically included |
1-2 employees | £10-£20 (£5-£10 per employee) | £25-£40 | £120-£240 (PEPM) / £300-£480 (fixed) | Payslip generation, RTI submission, basic email support, P60s at year-end |
3-5 employees | £20-£50 (£4-£10 per employee) | £40-£75 | £240-£600 (PEPM) / £480-£900 (fixed) | As above plus pension auto-enrolment administration, starters/leavers processing |
6-10 employees | £36-£100 (£6-£10 per employee) | £50-£120 | £432-£1,200 (PEPM) / £600-£1,440 (fixed) | Full RTI, pension scheme liaison, quarterly reporting, dedicated account contact |
11-25 employees | £66-£375 (£6-£15 per employee) | £80-£300 | £792-£4,500 (PEPM) / £960-£3,600 (fixed) | Comprehensive payroll, pension administration, HR portal integration, priority support |
26-50 employees | £156-£1,000 (£6-£20 per employee) | £200-£600 | £1,872-£12,000 (PEPM) / £2,400-£7,200 (fixed) | Advanced reporting, multi-location payroll, BACS file generation, compliance monitoring |
51-100 employees | £306-£2,000 (£6-£20 per employee) | Custom quotes | £3,672-£24,000 (PEPM) | Dedicated payroll manager, bespoke reporting, audit-ready documentation |
100+ employees | Negotiated PEPM rates, often £5-£12 per employee | FTE or bespoke contracts | Varies significantly | Full-service including P11D processing, share schemes, international payroll coordination |
Important notes:
- Pricing assumes monthly pay frequency. Weekly payroll typically adds 15-30% to costs due to increased processing frequency.
- CIS processing (construction) adds £1-£20 per subcontractor certificate on top of base payroll fees.
- Add-ons like pension administration, P11D filing, and BACS payments may be extra depending on provider.
For accountancy practices reselling white-label payroll, understanding these wholesale costs is critical to setting profitable client fees. Many practices mark up outsourced payroll by 50-100%, charging clients £8-£15 per payslip while paying providers £4-£6.
PAYE vs CIS payroll: cost differences explained
Standard PAYE payroll and Construction Industry Scheme (CIS) payroll have different compliance workflows, which directly impacts pricing.
Standard PAYE payroll
PAYE (Pay As You Earn) is the baseline payroll process for most UK businesses. It involves:
- Calculating gross pay, tax, and National Insurance
- Submitting Real Time Information (RTI) to HMRC on or before payment
- Generating payslips and year-end forms (P60s, P11Ds)
- Managing pension auto-enrolment contributions
Standard PAYE pricing follows the PEPM and per-payslip models outlined above, typically £4-£10 per employee for a fully managed service.
Construction Industry Scheme (CIS) payroll
CIS is a specialist tax regime for contractors paying subcontractors in construction. Additional compliance steps include:
- Verifying subcontractors with HMRC before first payment
- Calculating deductions at 0% (gross), 20% (standard), or 30% (higher rate)
- Filing monthly CIS returns to HMRC
- Issuing payment and deduction statements to each subcontractor
These extra steps mean CIS payroll costs more. Typical CIS pricing structures:
Per-certificate/per-subcontractor fees:
- Simple CIS processing: £1-£5 per certificate
- Standard CIS with verification: £5-£15 per certificate
- Complex CIS (multiple pay rates, retention, materials): £10-£20 per certificate
Alternative CIS pricing:
- Some providers charge a flat monthly fee for CIS administration (£50-£200/month) plus a per-subcontractor rate
- Others integrate CIS into standard PEPM pricing but at a higher tier (£8-£15 per subcontractor per month)
Cost comparison example
Scenario: Small construction firm with 3 employees (PAYE) and 15 subcontractors (CIS)
Option 1: Standard PAYE + per-certificate CIS
- 3 employees at £6 PEPM = £18/month
- 15 CIS certificates at £10 each = £150/month
- Total: £168/month (£2,016/year)
Option 2: Integrated CIS payroll provider
- Flat monthly fee for CIS administration: £120/month
- Includes up to 20 subcontractors
- Total: £120/month (£1,440/year)
For construction businesses, finding a provider with competitive CIS pricing is essential. Many generic payroll bureaus charge premium rates for CIS because it requires specialist knowledge and additional HMRC liaison.
In-house payroll vs outsourcing: the full cost comparison
Many businesses compare outsourced payroll fees to the basic cost of payroll software and assume they’re saving money by keeping it in-house. This overlooks the true total cost of ownership.
True cost of in-house payroll
Running payroll internally requires people, systems, and time. Here’s the realistic breakdown for a business processing payroll for 50 employees:
- Payroll manager/administrator salary
According to 2025 UK salary data, payroll managers earn between £32,750 and £60,000 annually depending on experience and location, with a median of £45,000. For smaller businesses, a part-time payroll administrator might cost £20,000-£30,000.
- Employer costs
- National Insurance contributions: 15% on earnings above £9,100 (from April 2025)
- On £45,000 salary: (£45,000 – £9,100) × 15% = £5,385
- Pension auto-enrolment: Minimum 3% employer contribution
- On £45,000: £45,000 × 3% = £1,350
- Software and systems
- Payroll software licence: £200-£1,200 per year for cloud solutions like BrightPay, Sage, Xero Payroll
- RTI filing software: Often included, but legacy systems may require upgrades
- Pension platform fees: £30-£50/month if using external auto-enrolment platform
- Annual platform cost: £360-£600
- Hidden overheads
- Training and CPD: Payroll regulations change constantly. Budget £300-£800 annually for courses and memberships (CIPP, etc.)
- Holiday and sick cover: Need backup arrangements or risk delayed payroll (cost of temporary staff or overtime)
- Recruitment and turnover: If your payroll person leaves, recruitment fees can hit 15-20% of salary (£7,000-£9,000)
- Workspace, IT, and admin: Desk, laptop, software licences, phone – conservatively £2,000/year
Total annual in-house cost for 50 employees:
- Salary: £45,000
- NI: £5,385
- Pension: £1,350
- Software: £800
- Platform fees: £480
- Training: £500
- Overheads: £2,000
- TOTAL: £55,515/year
This doesn’t account for error risk. HMRC penalties for late or incorrect RTI submissions range from £100-£400 per month for 50 employees. A single missed auto-enrolment duty can trigger penalties from The Pensions Regulator starting at £400.
Cost of outsourcing payroll (50 employees)
Using the pricing data from earlier:
- PEPM model at £8 per employee: 50 × £8 = £400/month
- Annual cost: £400 × 12 = £4,800
Add-ons to consider:
- Setup fee (one-time): £250
- Pension admin premium: £2/employee/month = £100/month extra = £1,200/year
- Total year 1 cost: £6,250
- Ongoing annual cost: £6,000
ROI calculation
Using our formula from the bookkeeping guide:
ROI = (In-house cost – Outsourced cost) ÷ Outsourced cost × 100
For our 50-employee example:
- In-house cost: £55,515
- Outsourced cost: £6,000
- ROI = (£55,515 – £6,000) ÷ £6,000 × 100 = 825%
That’s an 825% return on investment. For every pound spent on outsourcing, the business saves £8.25 compared to in-house processing.
Five-year cost projection
Option | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | 5-year total |
In-house payroll | £55,515 | £57,735 (4% salary rise) | £60,044 | £62,446 | £64,944 | £300,684 |
Outsourced payroll | £6,250 (inc setup) | £6,180 (3% inflation) | £6,365 | £6,556 | £6,753 | £32,104 |
Savings | £49,265 | £51,555 | £53,679 | £55,890 | £58,191 | £268,580 |
Assumptions: 4% annual salary growth for in-house staff; 3% annual price increase for outsourced services.
Over five years, outsourcing payroll for a 50-person business saves approximately £268,580 compared to employing a full-time payroll manager. This calculation assumes the outsourced provider delivers error-free, compliant payroll and that you avoid penalties, rework, and management distraction.
Hidden costs and add-on service fees
While headline PEPM or per-payslip rates are transparent, several add-ons can increase total costs. Understanding these upfront prevents bill shock.
Setup and onboarding fees
Most providers charge a one-time setup fee to migrate existing payroll data, configure RTI submissions, and train you on their systems. Typical UK setup fees in 2025:
- Micro-businesses (1-5 employees): £50-£150
- Small businesses (6-25 employees): £100-£300
- Mid-sized businesses (26-50 employees): £200-£500
- Large businesses (50+ employees): £350-£1,000+
Some providers waive setup fees if you commit to a 12-month contract. Others charge per-employee setup fees (£2-£5 per employee).
New PAYE scheme registration:
If your business is registering for PAYE for the first time, expect an additional £75-£150 for HMRC registration administration.
Pension auto-enrolment administration
Since 2012, UK employers must auto-enrol eligible employees into a workplace pension. Managing this adds administrative overhead.
Provider pension admin fees:
- Monthly fee: £1.50-£2.50 per employee enrolled in the pension
- Scheme setup: £100-£250 one-time charge
- Annual re-enrolment (every 3 years): £50-£150
Pension platform costs:
If you’re using NEST (no platform fee), this is free. If using a commercial provider like Aviva, Scottish Widows, or The People’s Pension, expect £30-£50/month platform charges.
Many “fully managed” payroll packages include basic pension administration, but check what’s covered. Some only handle contribution calculations and leave you to manage the pension portal separately.
Year-end reporting (P60s, P11Ds)
P60 processing:
P60s (end-of-year certificates showing total pay and deductions) must be issued by 31 May. Most providers include P60 generation in standard fees, but some charge per employee:
- Typical P60 fee: £2-£5 per employee (often waived if using a managed service)
P11D processing:
P11Ds report benefits-in-kind and expenses. If your business provides company cars, medical insurance, or director loans, P11Ds must be filed by 6 July. This is usually an add-on:
- Per-employee P11D: £10-£25
- Complex P11D (multiple benefits): £25-£75
BACS payment file generation
Some payroll providers generate payslips and RTI submissions but leave you to handle physical payments to employees. Others include BACS payment file generation or even execute payments directly.
BACS fee structures:
- File generation only (you upload to your bank): Usually included, sometimes £5-£10 per payroll run
- Managed BACS (provider submits payments on your behalf): £15-£40 per payroll run
Off-cycle runs and amendments
Life happens. Employees leave mid-month, bonuses get paid, or you need to correct an error. Off-cycle (ad-hoc) payroll runs often attract additional charges:
- Leaver payslip: £5-£15 per occurrence
- Bonus run: £10-£25 per run
- Corrections/adjustments: £10-£30 per amendment
Ask providers how many “free” amendments are included per month before charges apply.
Support and communication costs
Most UK payroll providers include email and phone support within standard fees. However, some budget providers limit support hours or charge for:
- Dedicated account manager: Premium service, may add 10-20% to base cost
- Out-of-hours support: Typically £30-£60 per instance
- On-site visits or training: £200-£500 per day
White-label payroll for UK accountancy firms
Accountancy practices increasingly offer payroll as a bundled service to generate recurring revenue and deepen client relationships. Rather than building internal payroll capacity, many outsource to white-label providers and resell at a markup.
How white-label payroll works
A white-label payroll partner processes client payrolls under your firm’s brand. Your clients interact only with you; the outsourced team operates invisibly in the background. You maintain the client relationship, manage queries, and handle invoicing, while the provider delivers the technical payroll execution.
Wholesale pricing for accountants
White-label payroll providers typically offer accountants volume-based pricing that’s 30-50% below retail rates:
Typical wholesale PEPM rates for accountants:
- 1-5 employees per client: £3-£5 per employee per month
- 6-25 employees per client: £2.50-£4 per employee per month
- 26+ employees per client: £2-£3.50 per employee per month
Per-payslip wholesale rates:
- £2-£4 per payslip (compared to retail £5-£8)
Reseller margin example
Scenario: Accountancy practice with 30 payroll clients averaging 8 employees each
Wholesale cost (white-label provider):
- 30 clients × 8 employees = 240 employees total
- Wholesale rate: £3 per employee
- Monthly wholesale cost: 240 × £3 = £720
- Annual wholesale cost: £720 × 12 = £8,640
Retail pricing to clients:
- Firm charges clients £8 per employee per month
- Monthly revenue: 240 × £8 = £1,920
- Annual revenue: £1,920 × 12 = £23,040
Annual gross profit from payroll:
- Revenue: £23,040
- Cost: £8,640
- Profit: £14,400
- Margin: 62.5%
For accountants, white-label payroll transforms a low-margin administrative task into a profitable, recurring revenue stream without the overhead of hiring specialist payroll staff.
Benefits for accounting practices
- Capacity without hiring: Handle payroll for dozens of clients without employing payroll administrators
- Profit margins: Typical markups of 50-150% on wholesale costs
- Client retention: Offering payroll alongside accounts and tax creates stickier client relationships
- Compliance de-risked: Specialist providers handle RTI, pensions, and HMRC changes, reducing your professional indemnity exposure
- Scalability: Onboard new payroll clients immediately without capacity constraints
Regional and provider type pricing variations
Payroll costs vary depending on where your business is located and what type of provider you choose.
Geographic pricing differences
Unlike bookkeeping, where London commands a significant premium, payroll pricing is more uniform across the UK because much of the work happens digitally. However, some regional variation exists:
- London and South East: PEPM rates tend to be 10-15% higher; expect £6-£12 per employee for standard managed payroll
- Regional cities (Manchester, Birmingham, Leeds, Edinburgh): More competitive; £5-£9 per employee common
- Rural areas: Often cheaper but may have fewer specialist providers; £4-£7 per employee
For businesses with remote or distributed teams, location matters less if you choose a cloud-based payroll provider. Most UK providers operate nationally.
Provider type comparison
Provider type | Typical cost | Advantages | Considerations |
Freelance payroll bookkeepers | £15-£30/hour or £50-£150/month | Personal service, flexible, good for micro-businesses | Capacity limits, holiday/sick cover issues, may lack pension/CIS expertise |
Local payroll bureaus | £4-£10 per employee PEPM | Established processes, local support, competitive pricing | Quality varies; check compliance track record and insurance |
National payroll companies | £6-£15 per employee PEPM | Robust systems, comprehensive services, scalable | Can be impersonal; mid-tier pricing |
Accountancy firms (with in-house payroll) | £8-£20 per employee PEPM | Integrated tax/accounts/payroll advice; convenient for existing clients | Higher cost; may subcontract actual processing |
Offshore providers (no UK oversight) | £2-£5 per employee PEPM | Very low cost | Compliance risk; time zone issues; limited UK regulatory knowledge |
Hybrid UK-supervised offshore (e.g., Acenteus) | £3-£8 per employee PEPM | Cost efficiency + UK oversight; compliant; scalable | Requires clear communication processes |
2025 UK compliance and regulatory impact on payroll costs
Payroll compliance in the UK continues to evolve, with several 2025-specific changes affecting how providers price their services.
Real Time Information (RTI) and Making Tax Digital
RTI has been mandatory since 2013, requiring employers to report PAYE information to HMRC on or before each payday. With Making Tax Digital expansion, digital record-keeping and submission standards are tightening.
Cost impact:
All payroll providers now include RTI-compliant software in their base pricing. However, businesses attempting DIY payroll with non-compliant systems risk penalties:
- Late RTI submission: £100-£400 per month depending on company size
- Repeated errors: Additional penalties and HMRC scrutiny
Outsourcing eliminates this risk. Providers absorb the cost of maintaining compliant systems and staying updated with HMRC changes.
Pension auto-enrolment
Auto-enrolment compliance requires:
- Assessing all employees every pay period
- Enrolling eligible workers
- Calculating and remitting contributions
- Re-enrolling leavers every 3 years
- Maintaining detailed records for The Pensions Regulator audits
Cost impact:
Providers charge £1.50-£2.50 per enrolled employee per month for pension administration. This covers:
- Contribution calculations
- Pension scheme file uploads
- Re-enrolment tracking
- Compliance reporting
Failing to comply with auto-enrolment can result in fixed penalties starting at £400, escalating to daily penalties of £50-£10,000 depending on employer size.
Construction Industry Scheme (CIS)
CIS compliance requires monthly returns to HMRC and detailed record-keeping for all subcontractor payments. As noted earlier, CIS processing adds £1-£20 per certificate to standard payroll costs.
2025 CIS update:
HMRC increased scrutiny on CIS verification and status checks. Providers with robust CIS systems help you avoid penalties for:
- Failing to verify subcontractors: £3,000 per failure
- Incorrect deduction rates: Interest and penalties on underpaid tax
- Late CIS returns: £100 per return, escalating for repeated delays
National Insurance and tax changes
From April 2025, Employer National Insurance contributions increased from 13.8% to 15%. While this doesn’t directly affect outsourcing costs, it does increase the total employment cost, making the case for efficient payroll processing even stronger.
Minimum wage changes:
National Living Wage increased to £11.44/hour (from April 2024), with further rises expected in 2025-26. Payroll providers ensure correct rates are applied, avoiding underpayment penalties.
How to choose the right payroll provider and pricing model
With dozens of providers and multiple pricing structures, choosing the right fit requires a decision framework.
Decision framework by business profile
Micro-businesses (1-5 employees):
- Best model: Fixed monthly fee (£30-£60/month) or per-payslip (£3-£5)
- Provider type: Local bureau or freelance bookkeeper
- Priorities: Low cost, simplicity, responsive support
Small businesses (6-25 employees):
- Best model: PEPM (£5-£10 per employee)
- Provider type: Established payroll bureau or accountancy firm
- Priorities: Pension integration, RTI compliance, scalability
Growing businesses (26-100 employees):
- Best model: PEPM with volume discounts (£6-£12 per employee)
- Provider type: National payroll company or hybrid offshore provider
- Priorities: Advanced reporting, HR integration, dedicated account management
Accountancy firms (white-label resellers):
- Best model: Wholesale PEPM (£2-£5 per employee) or FTE for high volume
- Provider type: Specialist white-label payroll partner
- Priorities: Margin, quality control, client communication processes
Construction firms (CIS):
- Best model: CIS-specialist provider with per-certificate or bundled pricing
- Provider type: Bureau with proven CIS expertise
- Priorities: Verification accuracy, subcontractor portal, compliance guarantees
Questions to ask providers before committing
Before signing a payroll outsourcing contract, ask:
- What’s included in your base fee?
- RTI submissions?
- P60s and year-end reporting?
- Pension auto-enrolment administration?
- BACS payment file generation?
- Starters and leavers (how many per month)?
- What are your add-on fees?
- Setup and onboarding charges?
- Off-cycle payroll runs?
- P11D processing?
- Amendments and corrections?
- How do you handle compliance?
- Who is responsible if RTI is submitted late?
- Do you guarantee penalty-free processing?
- How do you stay updated with HMRC changes?
- What’s your service level agreement (SLA)?
- Payroll processing deadlines?
- Response times for queries?
- Availability of support (phone, email, portal)?
- What happens if there’s an error?
- Who pays HMRC penalties if the error is yours?
- What’s your errors and omissions insurance cover?
- How do you handle corrections and employee communications?
- How secure is my data?
- ISO 27001 or Cyber Essentials certification?
- Where is payroll data stored (UK, EU, offshore)?
- Encryption standards and access controls?
- Can I leave if I’m unhappy?
- Notice period?
- Data handover process?
- Exit fees?
Acenteus CCA: hybrid payroll solutions for UK accountants
Why hybrid offshore-UK payroll delivers the best ROI
Acenteus CCA operates a hybrid model: payroll processing happens offshore where operational costs are lower, while UK-qualified chartered accountants provide oversight, quality control, and client communication.
This structure delivers:
- Cost efficiency: 40-60% below pure UK payroll bureaus
- Quality assurance: UK CPA review ensures RTI accuracy, pension compliance, and HMRC standards
- Scalability: Handle 10 clients or 1,000 with consistent quality
- Compliance first: MTD-ready, RTI-native, CIS-capable systems
White-label payroll for accountants
Our white-label payroll service allows UK accountancy practices to offer professional payroll under their own brand without hiring payroll staff:
Wholesale pricing:
- £3-£5 per employee per month (depending on volume)
- Setup fees: £100-£250 per client
- No minimum contract; scale up or down as your practice grows
What’s included:
- RTI submissions on or before payday
- Payslip generation and distribution
- Pension auto-enrolment administration
- P60s and basic P11Ds
- Year-round email and phone support
- Client portal access for employees
Your margin opportunity:
Charge your clients £8-£12 per employee. At £5 wholesale cost and £10 client charge, you earn £5 profit per employee with zero internal overhead.
Technology and integration
We integrate seamlessly with Xero, QuickBooks, and Sage, as well as pension platforms like NEST, The People’s Pension, and auto-enrolment providers.
Our cloud-native systems mean:
- Real-time access to payroll data
- Automated bank feed reconciliation
- Digital approval workflows for partners
- Audit-ready documentation
Making the right choice for your business
Payroll outsourcing in the UK has matured into a strategic decision rather than a simple cost-cutting exercise. With high CPC values of £8-£10 for payroll cost searches, it’s clear that businesses and accountants are actively evaluating their options right now.
The case for outsourcing is compelling: for a 50-employee business, keeping payroll in-house costs approximately £55,000 annually once you account for salary, NI, pension, software, and overheads. Outsourcing the same function costs £4,800-£6,000 per year, delivering an ROI of over 800% while eliminating compliance risk, freeing internal capacity, and providing scalability.
For UK accountancy practices, white-label payroll presents a high-margin recurring revenue opportunity. At wholesale costs of £3-£5 per employee and client charges of £8-£12, firms can generate 60-100% gross margins without the overhead of hiring payroll staff.
The key is choosing a provider whose pricing model, service level, and compliance capability align with your needs. Whether you opt for per-employee-per-month pricing, fixed fees, per-payslip, or FTE models, transparency is essential. Ask detailed questions about what’s included versus extra, compare total cost over 12-36 months, and evaluate providers on compliance track record and data security as much as headline price.
Acenteus CCA’s hybrid offshore-UK payroll model offers UK accountancy practices and businesses the best of both worlds: cost efficiency (40-60% below pure UK bureaus) combined with UK-qualified oversight, MTD-ready systems, and transparent pricing. Our white-label solutions allow practices to scale profitably while maintaining client relationships and compliance standards.
Ready to calculate your exact payroll outsourcing ROI? Contact Acenteus CCA for a no-obligation quote tailored to your employee count, pay frequency, and service requirements. Discover how our hybrid delivery model can reduce your payroll costs by 30-60% while eliminating compliance risk and freeing your team to focus on higher-value advisory work.
Frequently Asked Questions (FAQ)
For standard managed payroll in 2025, typical per-employee costs range from £5-£12 per month depending on service level and employee count. Micro-businesses pay towards the higher end; larger firms negotiate volume discounts.
DIY payroll software costs £5-£25 per month for basic plans. However, you must factor in your time (2-4 hours per month minimum), risk of errors, and keeping up with tax/pension rule changes. For most businesses beyond 5 employees, outsourcing offers better total cost of ownership.
Weekly payroll typically costs 15-30% more because providers process four times as many pay runs. Some charge per-run fees (£20-£40) making weekly significantly more expensive over a year.
Yes. Most providers charge £50-£500 depending on business size and complexity. Some waive setup fees with 12-month contracts. New PAYE registrations may attract additional charges (£75-£150).
Basic PEPM pricing usually includes pension calculations, but active scheme administration (uploading contribution files, managing opt-outs, re-enrolment tracking) often costs an extra £1.50-£2.50 per enrolled employee per month.
Director-only companies (1-2 directors) typically pay £25-£50 per month on a fixed fee or £5-£10 per director per month on PEPM. Some providers offer special "micro" packages at £20-£30/month.
CIS processing adds £1-£20 per subcontractor certificate to your payroll costs, depending on complexity and volume. Choose a provider experienced in CIS to avoid verification errors and compliance penalties.
Managed payroll typically includes payslip generation, RTI submissions, and basic support. Fully managed payroll adds pension administration, year-end reporting, BACS file generation, dedicated account management, and often includes P11D processing.
Many providers offer managed BACS services where they generate and submit payment files directly to your bank, or even execute payments from a trust account. This usually costs £15-£40 per payroll run on top of standard fees.
For very small headcounts, the cost-benefit is marginal. At £25-£50/month outsourced versus £10-£20/month DIY software plus your time, you're paying for convenience and compliance certainty. Many micro-businesses find the peace of mind worth it.
Providers typically need:
- Number of employees
- Pay frequency (weekly, fortnightly, monthly)
- Whether you need CIS processing
- Pension scheme details (if applicable)
- Add-on requirements (P11Ds, BACS, reporting)
Reputable providers use encrypted cloud systems, restrict access controls, and hold ISO 27001 or Cyber Essentials certification. Always ask where data is stored (UK-based servers offer stronger GDPR protections) and what security audits they undergo.
Good providers carry professional indemnity insurance and guarantee to cover HMRC penalties arising from their errors. Check your contract for error liability clauses and ask about their errors and omissions cover limits.
With organised records, onboarding typically takes 2-4 weeks from contract signature to first live payroll run. Providers need access to previous payslips, employee details, P45s for recent starters, and current pension scheme information.
Your provider handles RTI submissions and most HMRC correspondence related to payroll. However, as the employer, you remain legally responsible for compliance. You'll still need to respond to HMRC for employer-specific matters (e.g., Employment Allowance claims, disputes).
Yes. Many providers identify if you're eligible for Employment Allowance (reducing your NI bill by up to £5,000/year) and handle the claim as part of their service.
Pure UK providers typically charge 30-50% more than hybrid offshore-supervised models due to higher labour costs. A UK-only provider might charge £8-£15 per employee; a hybrid provider £4-£8 for equivalent service quality.
Many outsourced accounting providers offer combined bookkeeping and payroll packages, often at a discount versus buying separately. Bundling with one provider can improve integration and reduce communication overhead.
P11D processing (benefits-in-kind reporting) typically costs £10-£25 per employee with simple benefits, rising to £25-£75 for complex scenarios (multiple company cars, director loans, beneficial loans).
Yes. Many providers offer catch-up services for businesses with overdue RTI submissions or arrears. Expect to pay premium rates (£50-£150/hour) for remedial work, but this is often cheaper than HMRC penalties and interest.
