What is the cost of payroll software in the UK?

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The cost of payroll software is a key factor in purchasing decisions when it comes to switching solutions. However, it’s often unclear exactly how much you’ll pay until it comes to contract signature.

While it’s not always straightforward, it’s essential you have the pricing at your fingertips, including all additional charges before you commit to a provider. With this in mind, we’ve covered everything you need to know about the cost of payroll software in the UK.


Various factors impact the cost

The cost of payroll software is influenced by a myriad of factors, including:

  • The industry you operate in

Your industry determines the type of payroll software you need. For example, your needs will be different as a bureau vs an in-house payroll team. The more complex the structure of your business, the more likely it is you’ll need specialist payroll software e.g. are you able to manage all clients within one login/portal?

  • The size of your business

This includes the number of people using and being paid by the software. Generally speaking, the higher the number of those being paid, the higher the cost. For internal team members using the system, check if there are any additional charges for each account and whether this would change if the number of users were to increase.

  • The payment model

Software providers will have different payment models, including monthly, annually, fixed or cost-by-usage.  It’s important to assess what works best for you not just in the short-term, but over the length of your relationship with the vendor. For instance, are there any additional support charges or costs for future feature releases?

In the temporary payroll sector, many organisations will see fluctuations due to the economic climate (as we’ve seen recently with COVID-19) and seasonal peaks and troughs. Ensure you understand the costs if the numbers do fluctuate and whether a fixed charge or a variable charge is most suitable for your business.

  • Your contract length

You may be able to redeem a discount if you lock in your contract for longer, typically on a 1-, 2- or 3-year basis. Locking in this level of commitment is often mutually beneficial, as you can avoid any ongoing price increases and ensure you have a trusted software partner that you have built a reputation with. This makes choosing your preferred software provider even more essential.


What is (and isn’t) included in the price

Again, this depends on the provider. But you should consider the things that may or may not be included in the price, including:

  • Technical support
  • Training
  • Upgrades and updates: consider both compliance requirements and new feature updates
  • Further requirements if your business grows
  • Bespoke functionality

Watch out for any hidden costs that may make some solutions more expensive than anticipated.


Price shouldn’t be your main consideration

Cost involves a lot more than the price of the software. It also includes the opportunity cost of switching to a solution that increases productivity and decreases the time spent running payroll. Settling on price alone is a dangerous mistake to make and can end up costing you in the long term.

Also bear in mind that cost is not an accurate representation of quality. A common misconception is that paying more will get you better software, while paying less is a red flag. The best way to assess suitability is by requesting a demo/trial and client testimonials.


A better way to make a decision

Of course, price will always be a key consideration, but make suitability and functionality your top deciding factors. Payroll software should make your job easier and save your business precious time.

Download our free Payroll Software Buyer’s Guide for a simple step-by-step overview on how to choose the right solution.


Codapay payroll software offers complete value for money, offering a flexible pay-per-usage model and time-saving features that increase your team’s productivity. Get a bespoke quote.

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