How Much Does Payroll Software Cost in 2025?

The cost of reliable payroll software in the UK tends to vary according to how many employees you have and how many features you need. It can go from around £80 per month for small businesses to thousands for large enterprises with large HR teams in 2025.

Top payroll software solutions simplify and automate payroll processes that would otherwise take hours to complete. So while they may command a sizeable sign-up fee and significant monthly costs, most businesses quickly see the return on their investments.

In this article, we’ll give you some specific price points you can use to make the right decision for your business, as well as some information on the alternatives worth considering if it’s a little bit out of your budget.

Typical Payroll Software Costs in 2025

In 2025, payroll software costs are usually segmented into different plans based on the size of the business they’re meant for and the features they offer.

• Payroll software for small businesses: £16 to £32 per month, plus £2 to £5 per employee that is paid through the software.
• Payroll software for medium-sized businesses: £24 to £48 per month, plus £3 to £6 per employee.
• Payroll software for enterprises: Starts around £48 per month plus £5 to £10 per employee, going up to £120 per month, plus £5 to £10 per employee. Some enterprise payroll software requires a minimum number of employees.

Because the standard payroll software pricing structure includes a flat monthly fee and a per-employee monthly fee, prices can vary significantly depending on the size of your business. Here are some rough estimates of how much you should budget.

• Less than 10 employees: Up to £86 per month.
• Less than 50 employees: Up to £275 per month.
• Less than 100 employees: Up to £640 per month.
• 500+ employees: From £2,500 or more per month.

If you want to go a little deeper into the specifics, keep reading.

Payroll Software Pricing Models

Not all payroll software charges its users in the same way. Understanding the four main pricing models will allow you to select the most cost-effective option for your business.

SaaS Subscription With Seats

This is the most common pricing model for payroll in 2024. You’re charged a monthly base rate for use of the software in general, and then an additional monthly rate for each employee getting paid. This model works well for all business sizes, though you may find that the cost per payslip decreases the more payslips you add to the subscription.

Base fees can range from £16 to £120 per month, with an additional cost per employee of around £2 to £10.

Fixed Monthly Fee

This is the most straightforward pricing model. You pay a fixed amount every month, regardless of how many employees need to get paid via the software. This structure is ideal for businesses with stable employee counts.

Prices typically range from £40 to £160+ per month.

Pay-as-You-Go

A less common option in 2025, pay-as-you-go (PAYG) payroll software offers a flexible pricing model that allows businesses to pay only for the services they use, without being locked into a fixed monthly or annual subscription. This usually values consumption based on factors like the number of employees processed, specific features utilised, or the frequency of payroll runs.

This model is particularly beneficial for small businesses, startups, or companies with fluctuating payroll needs, as it provides the ability to scale services up or down based on current requirements.

However, it might be more expensive over the long run given the flexibility it provides. Prices often have a fixed starting price, followed by a cost per payslip, in a similar manner to the fixed fee and can range between £50 to £200+ per month.

One-Off Purchase

With this model, you pay only once for a payroll software license and then install the software directly on your servers. This is best for large businesses wanting control over their data and long-term cost savings.

Since major payroll software providers like Rippling typically offer custom pricing, price estimates are rough in 2025. Think anywhere from £800 to well over £8,000, based on company size and needed features.

Free

The free payroll model typically provides super basic payroll software with only the core features. It’s ideal for very small businesses or startups. However, you may end up paying if you need additional features or services.

Additional Payroll Software Costs

There’s often more than meets the eye with payroll software costs. Whether you go with a free plan or an enterprise suite, hidden costs tend to sneak in. Here are some common hidden costs to factor in when making your budget.

Setup Fees

Whether you’re starting from scratch or switching from a different payroll software provider, the setup process can be complicated. A service rep is often needed to install and configure the software and migrate data from your previous systems. Unless free setup is specifically mentioned on your provider’s website, you should be ready to pay for this service. Usually, the larger your business, the higher the setup fees.

Multi-Company Management

Some payroll solutions are designed for managing payroll across multiple companies. These software options offer features like payroll timetables with alerts and reminders and a secure client interface to reduce administration and errors.

Bolt-On Services

These are additional add-on features that provide enhanced functionality beyond what’s normally offered in your selected plan. Features include advanced reporting and automation, HR management, and even custom integrations for enterprises with heavy existing software infrastructure. Bolt-on services are either one-off fees or extra monthly charges in 2025.

Enhanced Customer Support

Most payroll software comes with standard customer support—but that might not be enough for complex businesses. For an additional monthly subscription, you can add things like 24/7 assistance, dedicated account managers, or in-depth employee training sessions. Professional onboarding can make sure you are acquainted with the software instead of learning the tools on the fly.

Payroll Software Alternatives

If payroll software is too expensive, not powerful enough to meet your needs, or too powerful for your needs, there are other ways to tackle the payroll problem.

Manual Payroll Processing

You could use the old-school method of doing everything manually. This involves keeping track of all payroll data—including bonuses, promotions, and tax requirements—on an Excel spreadsheet.

Though it’s cheap, we don’t recommend this method in 2025, since it’s prone to errors and could result in penalties for incorrect information. That’s one of the key advantages of payroll software – it helps ensure compliance without you really having to think about it.

Outsourced Payroll Services

For some businesses, running payroll in-house simply isn’t worth the trouble. But by using a specialised, third-party payroll service provider, you can cleanly outsource setup, regular payroll processing, tax filings, and anything else payroll-related.

Monthly costs are obviously much higher with a full payroll service than with an in-house payroll software.

Contractor Payments

Benefits, tax withholdings, and worker protections don’t apply to contractors—only employees. Hiring primarily contractors instead of employees can greatly simplify the payroll process, allowing you to cut out payroll software from the equation, or at least use a lower-tier, less expensive payroll software plan.

Next Steps

Just like other kinds of software, payroll solutions will vary in cost depending on the size of the business and the features needed in 2025. However, it’s worth remembering that be a lot cheaper to manage these processes in-house rather than requesting some sort of external service.

Small businesses might pay £16-£32 monthly plus £2-£5 per employee, while enterprises could spend up to £2,500 per month or more. Prices also change based on the specific pricing model you choose and the costs for any additional features you need.

As we just alluded to, some businesses choose to bypass payroll software costs entirely, outsourcing payroll to a third-party firm. If you think you want to go this route, check out our article on outsourced payroll costs.

Payroll Cost FAQs