Aug 6, 2023

Top 5 payroll software for small businesses in 2024

Small businesses need a streamlined payroll system to ensure their employees are paid accurately and on time. With so many payroll software options available, finding the best one for your needs can be challenging. This blog post will discuss small businesses' top payroll software options and why they are worth considering. Whether you are looking for affordability, ease of use, or robust features, we have you covered. Let's dive in!

Why good payroll software is critical for your small businesses?

Payroll software is essential for small businesses, as it allows them to accurately and efficiently manage employee pay. Payroll software can help small businesses save time, money, and resources by streamlining the payroll management process. Small businesses can automate tax calculations using payroll software, allowing for accurate deductions from employee payslips without manual intervention. Additionally, this will enable them to quickly generate and distribute payslips for their employees and manage salary payments and deductions. Not only does this reduce the cost of manual payroll operations, but it also ensures that all employees are paid correctly and on time and that you remain compliant.

Benefits of Using Payroll Software

In today's fast-paced business environment, streamlining operations is crucial for success. One area that often poses challenges for small business owners is payroll. However, these challenges can be significantly reduced with the advent of advanced payroll software. Here are some benefits of using online payroll software:

  1. Efficiency and Accuracy: Manual calculations can lead to errors. With top payroll software, calculations are automated, ensuring accuracy and saving time.
  2. HMRC-Recognised: Many online payroll software options are HMRC-recognised, ensuring your business complies with the latest tax regulations.
  3. Easy Access: Being web-based means you can access your payroll services from anywhere, anytime. This flexibility is especially beneficial for business owners who are on the move.
  4. Integration Capabilities: Advanced payroll systems can integrate with other business software, such as accounting software, providing a holistic approach to business management.
  5. Cost-Effective: In the long run, payroll software can be more cost-effective than hiring external payroll services, especially for businesses with a growing staff.

Top 5 payroll software for small businesses


This payroll software is ideal for small businesses with complicated payrolls involving hourly workers or contractors, as it is the only market solution that automates payroll for all types of employees. In addition to the typical payroll features such as payslip creation, RTI submissions, and employee self-service app, you can easily schedule shifts, track time and attendance, automate payroll calculations, and find replacements or extras. Moonworkers provides access to payroll advisors to help you set up payroll for the first time or switch to them and give ongoing support.


  • Best for customer support and a personalised HR and payroll experience.
  • Automates payroll for all types of employees, provides access to payroll advisors, offers comprehensive reporting tools and automated RTI submissions, and supports payslip printing and direct deposit for employees.
  • Simple and quick switching service that includes data transfer and online training.
  • Three-month money-back guarantee and setup come at no extra cost.
  • Very simple pricing plan and package.


  • It doesn’t offer managed payroll and HR services, so you will need the resources to manage everything on the app.
  • Built and developed with specific industries in mind – it could be limiting for other businesses.


The pricing plans start from £2.5 + VAT per month per employee and cover unlimited payrolls, rotas and HR.

Sage Payroll:

Sage Payroll is an ideal payroll solution for small businesses. It offers comprehensive reporting tools and automated RTI submissions. Additionally,  it is integrated with Sage accounting software, which can automate your entire finance department.


  • Integrated with Sage accounting software.
  • Offers UK-based 24/7 customer support both via online live chat and over the phone to make onboarding easier (unlike Moorepay and IRIS)
  • The multi-user access feature gives each user a secure login. External guests like a qualified accountant can also be added for additional support.
  • Sage’s built-in corrections feature can amend data without rerunning pay runs. IRIS requires you to use a backup to undo any changes.


  • You'll need to use the 24/7 access to a Sage expert. Our research found that customers report that setting up Sage is incredibly time-consuming.
  • Our researchers do not recommend Sage for new payroll users. We gave it just 2 out of 5 for usability - best for those with software experience.
  • It is designed for small businesses, so it might not suit larger companies.


The basic plan starts at £8/month + VAT, while the Plus plan costs £18/month + VAT.

12 by IRIS

12 by IRIS is a payroll solution for small and medium-sized businesses. It offers features such as automated RTI, year-end reports, and direct deposits. It also allows you to customize payslips and access employee self-service applications. Additionally, it comes with a mobile app that allows you to manage payroll on the go.


  • Automatic month-end P32 summary updates - dramatically reducing time spent on admin
  • In-depth reporting functionality is available to track employee data to help with key performance and evaluation decisions
  • Customers also reap the benefits of IRIS’s unlimited platinum phone and online support, which is incredibly helpful for first-time payroll software users
  • Compliant with GDPR and CIS.


  • Because it's more powerful software, IRIS can take longer to install and master than more usable rivals like QuickBooks.
  • The Employee Portal and ePay window are only available as paid-for add-ons.
  • Although 12 by IRIS is considered one of the best payroll finance software, some customers complain about poor customer service and delayed replies.
  • Doesn’t offer a built-in feature to enable you to print payslips. You can use IRIS’ ‘free’ ePayslip feature or an alternative method.


Pricing starts at an affordable £1.50 per employee/per month.


Xero Payroll is best for small businesses using Xero accounting software. It offers automatic payroll updates and payslip delivery. It's mobile-ready, offers basic reporting, and supports multiple currencies. Xero Payroll also integrates seamlessly with 600+ apps, including HR apps.


  • Reduce payroll admin and save time by giving your employees limited access via the Xero Me mobile app or the web. They can even enter timesheets and request leave remotely
  • The employee self-service feature is also incredibly handy for viewing payslips and requesting leave online, reducing the need for add-ons
  • Xero’s Payroll software has lots of integrations.


  • You must be using Xero accounting software to access the payroll service for a minimum cost of £6 per month
  • Xero Payroll offers limited support for annual HR reports, leaving you in the dark about employee costs and taxes.
  • There is no telephone support in the event of a problem. We recommend you consider a trial before committing to Xero, as the lack of customer support can create difficulties for new users.


Xero Payroll starts at £8 per month for the first employee, with an additional £6 per month for accounting software. Pricing increases as the number of employees increases.


Quickbooks is a comprehensive payroll software designed for small businesses. It offers features such as automated RTI submissions, direct deposits, and detailed reporting. Additionally, it integrates with various business systems, such as accounting and invoicing programs. It also provides an employee self-service app and payslip printing capabilities. Additionally, it offers unlimited payroll, technical support, and an auto-enrolment pension module.


  • Data is stored securely in UK IBM data centres with the latest Microsoft Azure cyber-secure technology, removing any risk to business continuity.
  • Unlimited payroll and technical support via phone, email, and live chat so you can get help whenever you need it
  • Free mobile app for employees to track their working hours, request leave, or view their payslips.


  • You'll need to purchase QuickBooks' premium plan for more advanced capabilities, such as tracking employee time and billable hours.
  • Employees can only be paid by direct deposit on Quickbook's lowest-tiered plan. You'll need to pay more for printable options.
  • QuickBooks charges an additional fee for data import.


Quickbooks Payroll costs £9 per month for up to three employees and £17 per month for five to 50 employees. The Payroll Core plan offers standard payroll features, while the Premium plan includes auto-enrolment, enhanced payroll features, and pension scheme management.

Criteria for selecting the best payroll software for small businesses

When selecting the best payroll software for small businesses, it is important to consider your business's unique needs, such as the number of employees, required features, and budget. Take advantage of free trials and demos offered by most payroll software providers to test out their services before committing to a subscription plan.

  1. Understand Your Needs: Consider your business's specific needs before exploring the myriad options available. How many staff members do you have? Do you need advanced payroll features or just the basics?
  2. Cost: One of the first considerations when choosing payroll software for small businesses is cost. Evaluating the features and services offered concerning what you are willing and able to pay is crucial. Small businesses should also consider additional installation, setup, training, and maintenance fees.
  3. Ease of Use: Small businesses should also look for payroll software that is easy to use and understand. Although the main aspects of UK payroll are relatively straightforward, some specifics can be overwhelming. For example, paying hourly or part-time workers requires understanding a few rules related to employment law and holiday pay. Therefore, adopting software that simplifies or even automates those aspects after setting up a few parameters could be interesting.
  4. HMRC-Recognition: Ensure the software is HMRC-recognised. This recognition ensures that the software meets the UK's tax standards.
  5. Features and Benefits: Small businesses should also look for payroll software with the necessary features and benefits. Some payroll software can provide reporting tools, employee self-service, mobile compatibility, and automated RTI submissions to send your payroll information after running payroll. Additionally, some providers offer integrations with other business software, such as accounting or HR programs.
  6. Customer Support: Small businesses should prioritise customer support above all else, especially if they plan to run payroll internally. As mentioned earlier, the initial set-up can be stressful for business owners or managers without any payroll experience. So, choosing a solution that provides access to professionals might be the key to getting on the right track.
  7. Free Trial: Before committing, opt for a free trial. This trial period will give you a hands-on experience of the software's features and usability.
  8. User Reviews: Look for user reviews online. These reviews can provide insights into the software's pros and cons.

Cloud-based payroll vs installable app

Cloud-based payroll solutions offer many benefits for small businesses. It is less expensive than an on-premises solution, can be quickly implemented, and is more secure than traditional software. Additionally, cloud-based payroll solutions are easier to use and maintain as updates are pushed out automatically.  
However, installable applications offer certain advantages over cloud-based solutions. This type of solution allows businesses to keep their data secure and provides more control over their payroll operations. Additionally, installable applications are typically less expensive than cloud-based solutions and can be tailored to specific business needs.  
Ultimately, the best option for a small business depends on their individual needs and budget. An installable app may be the best choice if it requires more robust features or has limited resources.

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Our comparison of the top 5 small business payroll software

Features and benefits comparison

In terms of features, Moonworkers offers a comprehensive solution to manage your entire business, automated RTI submissions, payslip printing and direct deposit for employees, an employee self-service app, and automated payroll calculations. Sage Payroll also offers automated RTI submissions, as well as year-end reports, payslip printing, and direct deposits. 12 by IRIS is more comprehensive than the other options and offers features such as automated RTI, year-end reports, and direct deposits. Xero comes with reporting tools, automated RTI submissions, direct deposit capabilities, and integrations with other business software. Lastly, QuickBooks provides features such as automated RTI submissions, detailed reporting, direct deposits, employee self-service app and payslip printing. Most of these vendors offer integrations with HR software and accounting (or embed them directly as part of an all-in-one solution).

Usability comparison

Regarding usability, Moonworkers is the best choice due to its automated complicated payroll calculations involving various workers, access to payroll advisors, and set-up with no extra cost. Sage Payroll is also a good choice for those with experience in software, as it offers 24/7 customer support. 12 by IRIS is better for more experienced users as it can take longer to install and master but offers first-time users unlimited platinum phone and online support. Xero is ideal for those who want to manage payroll online, while QuickBooks might be the best choice for tracking employee time and billable hours.

Customer support comparison

Moonworkers is the best option for customer support, as they provide access to payroll advisors. Sage Payroll offers 24/7 UK-based customer support via live chat but not the phone. 12 by IRIS allows you to access unlimited platinum phone and online support, while Xero and QuickBooks offer online support.

Free Trial

Moonworkers offers one month free, and the team is proactive during onboarding.  Sage Payroll provides a 30-day free trial for the first three months with no commitments. 12 by IRIS has a two-week free trial, and users can access the support team. Xero offers a 30-day free trial, and QuickBooks also offers a 30-day free trial.


Each software offers different tools to improve business processes, which means that the best payroll software for you depends on your needs. Moonworkers is a good choice if you want an all-in-one solution without strings attached and deal with a mixed workforce. Sage Payroll is ideal for experienced users who want payroll software with phone support. 12 by IRIS is good for those looking for a team of payroll advisors and unlimited platinum support. Xero offers the best payroll finance software for small businesses, while QuickBooks might be a good choice for tracking billable hours and time.

Common Mistakes to Avoid When Using Payroll Software

While payroll software offers numerous advantages, it's essential to be aware of common pitfalls to ensure smooth operations:

  1. Not Updating Software: Always ensure your software is up-to-date. This provides new features and ensures compliance with the latest HMRC regulations.
  2. Overlooking Training: Even the top payroll software requires some learning. To fully exploit the software's potential, offer training to staff members responsible for payroll.
  3. Ignoring Backups: Always back up your data. While many online payroll software options offer automatic backups, it's good practice to have an additional backup.
  4. Not Reviewing Payroll Reports: Always review payroll reports for discrepancies. Catching errors early can save time and potential legal issues.
  5. Over-reliance on Software: While software can handle most tasks, a basic understanding of payroll processes is essential. This knowledge can be invaluable in case of software issues.


Choosing the best payroll software for small businesses can be a daunting process. Before making any decisions, it is important to evaluate your needs and research the available options to find one that fits your budget and meets your specific requirements. Reading customer reviews and comparing features and prices between providers can also be helpful. We also recommend requesting demos to ensure you understand each software specificity. By taking the time to do this, you can ensure that you select the payroll software that is best suited to your business.

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Choose Moonworkers online payroll services for professional, reliable, and knowledgeable service.
We have been using Moonworkers for quite some time and compared to other software in the market, we found it very simple to use and excellent. Moreover, the customer service is great.
Shabir D.

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