Payroll services

At a glance

Fixed fee	£25 + VAT a month for up to 2 people, then £5 + VAT a month for each extra person. Included in our Standard and Complete packages.
Workplace pension	+£10 + VAT a month for assessments, enrolment and contribution files for your pension provider
Set-up	Free, including registering the company as an employer with HMRC
HMRC reporting	Full Payment Submission on or before every payday, Employer Payment Summary when needed
Pay frequency	Monthly as standard. Weekly and four-weekly payrolls are quoted individually.

What is included

• Registering the company as an employer with HMRC, if not already done
• Monthly payslips for each employee or director, sent by email or through FreeAgent
• PAYE and National Insurance calculated, including Employment Allowance where the company qualifies
• Real Time Information (RTI) submissions to HMRC on or before each payday
• A monthly note of how much PAYE to pay HMRC, the reference to use and the deadline
• New starters and leavers, including P45s
• Statutory sick, maternity and paternity pay
• P60s for everyone on the payroll at the end of the tax year
• Advice on the most tax-efficient director's salary for the year

Payroll prices

People on the payroll	Monthly fee
1 or 2 (for example a director, or a director and one employee)	£25 + VAT
3 or more	£25 + VAT, plus £5 + VAT for each person above 2
Workplace pension (auto-enrolment)	+£10 + VAT

Payroll for up to 2 people is already included in our Standard package at £119 + VAT a month, and full payroll in our Complete package at £150 + VAT a month. See the pricing page.

Employer rules worth knowing

Rule	Detail
Reporting to HMRC	A Full Payment Submission is due on or before each payday. Late filing penalties start at £100 a month for employers with 1 to 9 employees.
Paying HMRC	PAYE and National Insurance are due by the 22nd of the following month when paid electronically
National Living Wage	£12.71 an hour for workers aged 21 and over from April 2026
Employer's National Insurance	15% on each employee's pay above £5,000 a year. Employment Allowance of up to £10,500 can cancel this for many small employers, but not for a company whose only employee paid above the threshold is a director.
Workplace pension	Staff aged 22 to State Pension age earning over £10,000 a year must be enrolled. Minimum contribution is 8% of qualifying earnings, with at least 3% from the employer.
Year end	P60s to employees by 31 May. P11D expenses and benefits forms by 6 July.

Source: GOV.UK, running payroll and National Minimum Wage rates.

Director's salary and dividends

Most owners of a small limited company pay themselves a small salary through the payroll and take the rest as dividends. The salary uses up the tax-free personal allowance, counts as a year towards the State Pension and is a deductible cost for Corporation Tax. Dividends are then taxed at lower rates than salary and carry no National Insurance.

The best salary level depends on whether the company has other employees, whether you have other income and how much profit the company makes. We work this out for you at the start of each tax year and set the payroll up accordingly.

How it works

• You tell us who is paid, how much and on which date each month
• We run the payroll a few days before payday and send the payslips
• We file the submission with HMRC and tell you what to pay and when
• Changes, such as a new starter, a pay rise or sick leave, are a short message to us

What we need from you

• Each person's full name, address, date of birth and National Insurance number
• Their P45 from a previous job, or a starter checklist if there is none
• Pay rate and pay date
• Your employer PAYE reference and Accounts Office reference, if the company is already registered
• Pension scheme details, if you already have one

Payroll fits naturally alongside bookkeeping and company accounts, and runs inside FreeAgent so the figures flow straight into your books. If you are a contractor working through your own company, our contractor accounting page explains how salary, dividends and IR35 fit together.

Figures checked against GOV.UK and last updated on 9 October 2026.