payroll providers UK
British Pound Sterling (GBP)
English
Working Days
Monday to Friday
Working Hours
40 hours/week
Types of Employment Contracts
Permanent & Temporary
Probation Period
0 to 6 months
Payroll Cycle
Monthly
Payroll Tax
0% - 45%
Hire and pay employees across the globe
- Hassle-free payroll services for small businesses in the UK
- Cost-effective solution and alternative to in-house payroll services
- Remain compliant and enjoy a seamless international expansion
- Expert payroll providers in the United Kingdom
Your Partner Payroll Outsourcing Provider In The UK
Many outsourced payroll providers in the UK claim to fulfill your business needs at the lowest price points. Of these, most companies either offer partial payroll outsourcing services or solutions that come with tons of payroll errors. While they might sound like a lucrative deal, outsourcing payroll processes to such a provider will only lead to headaches, non-compliance, and a lot more expenses in the long run.
Your UK payroll provider should bring cost savings to the table and take care of all your outsourced payroll functions. Only then would you be able to spend more of your resources on improving the services rendered to your customers? So, it is important to choose a trustworthy payroll service provider in the UK, like Edge.
Let Edge Take Care Of Your Outsourced Payroll In The UK
At Edge, our payroll professionals take care of all your payroll processing operations and their integration with our HR services. Through our state-of-the-art payroll software, we ensure your company’s payroll runs as efficiently as possible. What’s more, all your payroll data is stored safely in our encrypted servers, meaning you never have to worry about data security. Our payroll software takes care of all transfers and electronic records.
When it comes to local regulations, we keep track of all updates from the tax authorities so you can avoid legal complications. Need more than just payroll services? Contact us, and we will tailor a customized global payroll processing plan for your business, combining HR and payroll services in the UK at the most affordable price points.
Guide To Our UK Payroll Services
With numerous years of experience, there is a reason why we are regarded as a trusted service provider for payroll processing services in the UK. Apart from our standard payroll outsourcing UK packages, we also offer customized plans that help you upscale and downscale the payroll process according to your business needs. In addition, we always keep you updated, whether that’s by sending you insights into your employee data or sharing metrics about your outsourced payroll solution. If you wish to outsource payroll, we can help.
Here’s everything we can do as part of our international payroll services in the UK:
- Calculating employee salaries (pre and post-deductions, including NICs, applicable taxes, leave allowances, etc.)
- Drafting employment contracts and setting up bank accounts (if required)
- Transferring salaries to employee accounts on time every month (or bi-weekly). We also issue payslips depending on your payroll frequency.
- Tax filing and associated paperwork
- Sending detailed payroll management reports to your HR team and management every month.
The Key Elements Of The UK’s Social Security System
- National Insurance Contributions (NICs): NICs are contributions made by individuals and employers to fund the UK’s social security system. It is used to fund the State Pension, Jobseeker’s Allowance, Support Allowance, and Maternity Allowance.
- State Pension: The State Pension is a regular payment provided by the UK government to eligible individuals who have reached State Pension age. It increases gradually with age. The amount paid as the State Pension depends on the NICs of the person.
- Employment and Support Allowance (ESA) – ESA provides financial support to individuals who are unable to work due to illness or disability. The contributory ESA is based on NICs.
- Other Elements – Personal Independence Payment (PIP), Universal Credit, Disability Living Allowance (DLA), Carer’s Allowance, and Housing Benefit.
Work Benefits For Employees In The UK
Payroll Cycle
The standard payroll cycle in the UK is run monthly. Salaries are paid between the 20th and 25th of a month. Some companies also resort to a bi-weekly payroll. Our payroll services ensure that the set payroll cycle is always followed.
Leave And Overtime
Outsourced payroll services by payroll providers should be aware of the leave allowances and overtime compensation guidelines.
- Annual Leave – Employees who have worked in a company for more than one year are entitled to a minimum of 28 days of paid annual leave per year, including bank holidays. They are also entitled to 5-6 weeks of pay as per their regular wages during the leave period. Some companies offer additional allowances and benefits.
- Sick Leave – Employees are entitled to Statutory Sick Pay (SSP) after the 3rd day of sickness at a rate of £99.25 per week for up to 28 weeks. Some employers offer additional sick leave pay as well.
- Parental Leave – Parental benefits in the UK are multi-faceted.
Female employees can take up to 52 weeks of maternity leave, with the first 6 weeks at full pay, followed by 33 weeks at the statutory rate of pay, set at £156.66 per week. Fathers are entitled to 2 weeks of paid paternity leave at the statutory rate of pay. Both parents can share up to 52 weeks of leave and 33 weeks of pay after birth or adoption.
- Overtime Allowance – Work exceeding 48 hours per week is considered overtime. The compensation rate is 1.5 times the regular wage for the first two hours, followed by 2 times the wage for every additional hour.
Depending on the job position, some employees might be exempted from this.
Minimum Wages
The minimum wage in the UK varies according to the age.
As of April 1st, 2023:
- Employees aged 23 and over: £10.42 per hour
- Employees aged 21-22: £10.18 per hour
- Employees aged 18-20: £7.49 per hour
- Employees under 18: £5.28 per hour
- Apprentices: £5.28 per hour
At the time of payroll processing, the payroll services company should ensure compliance with these minimum wage guidelines.
Severance Pay And Termination Of Contracts
If an employee is made redundant or unfairly dismissed after completing two years of service, they may be entitled to statutory redundancy pay. This is calculated as a week’s pay for each year of service, capped at a maximum of £544 per week, and subject to a maximum service length of 20 years.
Termination of the contract can be initiated by both parties. Notice period has to be served as stipulated in the employment contract. Severance pay may be due under certain circumstances, such as redundancy or unfair dismissal.
These clearances come under fully managed payroll service offered by outsourced payroll services companies.
Tax System In The UK
The tax regime for individuals and businesses in the UK is quite well structured. It involves personal and corporate income taxes, value-added tax (VAT), capital gains tax, and other levies.
For Individuals
- Personal Income Tax – Income tax is levied on all forms of individuals’ earnings, including salaries, wages, rental income, dividends, and interest earned. Employees receive a tax-free “Personal Allowance.” It is the amount of personal income they can earn before they start paying income tax. The Personal Allowance is £12,570 for the tax year 2022-2023.
These income tax specifications are subject to change every financial year. Income falling under a particular slab is charged a specific income tax rate, as follows:
Income Slab | Interest Rate Charged |
£0 – £12,570 | 0% (Personal Allowance) |
£12,571 – £50,270 | 20%</ |
£50,271 – £150,000 | 40% |
Above £150,000 | 45% |
- Capital Gains Tax (CGT) – This is the tax applied to the profit made from selling certain assets, such as property, stocks, and business assets.
- Value Added Tax (VAT) – The standard VAT rate in the UK is 20%, but it varies for some products and services.
- National Insurance Contributions (NICs) – NICs are contributions made by employees and employers to fund the UK’s social security system, including state pensions and other benefits.
CLASS | EMPLOYEE | EMPLOYER |
1 | Employees who earn above the Primary Threshold (£9,880 per year for the 2022-2023 tax year) and below the Upper Earnings Limit (£50,270 per year for the 2022-2023 tax year) pay Class 1 NICs. The rate for Class 1 NICs is 12% for an earning in between. For an amount greater than the upper limit, the rate is dropped by 2%. | The rate for Class 1 Employer NICs is 13.8% of employee earnings above the Secondary Threshold (£8,840 per year for the 2022-2023 tax year). |
1A | — | Class 1A NICs are paid by employers on certain benefits offered to employees in kind. |
1B | — | Class 1B NICs are paid by employers on items included in a PAYE Settlement Agreement (PSA). |
Others | Different NIC categories apply to self-employed individuals. The contribution rate and primary threshold vary accordingly. | — |
For Businesses
- Corporate Income Tax – Corporate tax is levied on the profits of both UK-based and non-resident companies with a permanent establishment in the UK. The current corporate tax rate is 19% for the financial year 2023. These rates can change every year. Thus, the company managing your outsourced payroll services in the UK should keep an eye on the latest updates to the tax rates.
- Value Added Tax (VAT) – The standard VAT rate for businesses is 20%.
- Miscellaneous Taxes and Levies – These include property taxes, employer National Insurance Contributions, and various environmental and industry-specific taxes.
More Services Available in United Kingdom
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Frequently Asked Questions
How much do payroll services cost in the UK? Also, how much do accountants charge for payroll services in the UK?
If you do payroll services cost comparison in the UK between payroll outsourcing companies and accountants, here’s what you would find.
Payroll outsourcing work offered by UK payroll providers ranges from as low as £10 to £50 or more monthly, based on the features and services included. Apart from this, some payroll bureau services in the UK also charge an additional per-employee fee from £1 to £5 or more, depending on the provider and the level of service.
Some payroll service providers in the UK offer additional payroll outsourcing services such as year-end processing, pension scheme processing, and handling of stipulated payments like sick pay and maternity pay. These services may incur additional costs and come under fully managed payroll service.
As for accountants, the hourly rates for managing payroll start from £20 to £100 or more per hour based on their experience and location.
Small businesses with limited payroll frequency and function offer flat fees between £100 and £500 per month, based on the services opted.
Accountants can charge additional fees for payroll outsourcing, which will include fees for processing payroll taxes, setting up payroll systems, and providing expert advice on payroll compliance.
What are the requirements of the payroll outsourcing service level agreement template in the UK?
A Service Level Agreement (SLA) is a legal document that outlines the terms and expectations between a business and its payroll service provider in the UK. The agreement specifies the services provided by the payroll outsourcing provider, which includes payroll processing, tax calculations, and compliance with regulatory requirements.
The SLA sets out the service delivery standards for payroll outsourcing service providers, including turnaround times for payroll processing and resolving queries and accuracy benchmarks for tax deductions and statutory payments. It also emphasizes compliance with HMRC regulations and data protection laws, with provisions for confidentiality, data security, and compliance monitoring.
The SLA includes disaster recovery and business continuity measures to ensure no disruptions to payroll processing during emergencies. It has performance metrics to assess the quality and timeliness of payroll services. Communication channels and escalation procedures are defined. It helps facilitate collaboration and issue resolution.
Termination provisions and transition procedures are outlined to enable a smooth transition to a payroll outsourcing model if required. The SLA also addresses legal and regulatory compliance, ensuring alignment with contract law and consumer protection regulations.
How to select from the best payroll service providers in the UK?
Choosing the best payroll outsourcing services in the UK can be challenging at times, owing to the plethora of available options. If you are running short of time and need to get going quickly, here are a few points you should consider when outsourcing payroll in the UK:
- Reliability and Accuracy – The payroll provider shouldn’t have a track record of making payroll errors and should ensure quality assurance of services provided.
- Security and Data Protection – Payroll software should be capable of encryption and securing your payroll data. It should handle sensitive data and transaction load effectively. The efficiency of the payroll software used is very important.
- Scalability and Flexibility of Services – The payroll outsourcing company should have plans tailored to the needs of businesses of all sizes and industries.
- Technology and Integration with HR (Human Resource) Services – Payroll outsourcing companies should offer seamless integration with other systems, such as HR software and accounting platforms.
- Transparent Pricing and Terms of Contract – They should discuss their payroll services UK prices transparently alongside other important terms of service.
- Exceptional Track Record and Reviews – If you’re looking for managed payroll companies in the UK, here’s a tip–always check out their client testimonials and reputation. You should make sure they’re reliable, accurate, and known for customer satisfaction.