How much does it cost accountants to outsource UK payroll?

Any accountants in the UK who are looking to outsource client payroll, will have one question at the very top of their mind: “How much does it cost to outsource UK payroll?”

Prices for payroll, vary depending on the type of client payroll you are outsourcing. Generally, there are two pricing models:

1. Same salary model

This is appropriate for simple payroll with the same salary details/amount every month.

2. Variable salary model

This is designed for more complex payroll requirements such as where your client has different types of employees (eg, part time/full time) or pay frequency (eg, weekly/fortnightly) or variable pay amounts.

What are the costs?

To make it easy for you to understand the overall costs, we have listed individual elements below:

1. Setup cost

The fee to set-up payroll with a supplier will vary according to the size of your accounting firm and your requirements. For a new company set-up, typical charges start at £10.00 per company as a one-off cost

2. Running payroll / Per payslip costs

This cost will vary depending on the number of payslips your accounting firm processes. Typically, you could expect to pay between £2 to £3 per payslip. Outsourcing companies generally give a discount when there are more payslips to process each month.

3. Auto-Enrolment

Accountants providing payroll services would also be offering Auto-Enrolment services as well, and if not this is an excellent opportunity to start offering it with minimal overhead investment. Outsourcing Auto-Enrolment costs are made up of three components:

• Initial review stage – generally this ranges form £15 to £25 per client
• Registration stage – you could expect this to range from £25 to £35 per client up to a maximum of 10 employees
• Compliance – on average you could be paying £0.75 per pay run per employee

4. Year-End Filing

HMRC has made the year-end filings very simple for each time payroll is processed. However, the primary concern is to ensure you submit your final FPS and/or EPS before 19th April. You could be expect to pay £20.00 per EYU (£10.00 for client set-up and £10.00 for processing)

How can you determine if payroll outsourcing is appropriate for your accountancy practice?

Compliance

• Do you constantly monitor evolving payroll legislation and adjust your processes to ensure compliance?
• Are you up-to-date with all related legislation, such as auto-enrolment?

Administration

• Do you always process payroll on time with 100% accuracy to avoid costly financial penalties for errors or non-compliance?
• Are you always able to answer payroll-related enquiries from your clients immediately and accurately?
• Are you putting valuable, strategic practice goals on hold to complete repetitive administrative tasks?
• Do you have the time you need to invest your skills and talents fully in your practice’s strategic goals?

If you’ve answered NO to any of the above questions, then it may be worth discussing your requirements with us. To help accountants evaluate our payroll services risk-free, we are offering a FREE non-obligatory trial.  The trial includes payroll work for 1 company with up to 5 employees for one pay run and reports as per your requirements. We usually provide the following reports: payslips, FPS, P30 and P32.  For more on this free-trial, please request a free quote and one of our team members will be happy to call you back.

Profitable payroll

To make the maximum profits from payroll, it is essential to move to an outsourced model. It is a straightforward way to turn a low-margin service into something that turns a profit, while also removing the time you spend on it and the investment you need in terms of software and hiring specialist payroll staff. Learn how to make payroll profitable for your practice using the free guide below.