Payroll Software

1. Is It for You?

Payroll software is not suitable for everybody.

1.1 If you employ few staff and your payroll changes infrequently, it is possible to operate payroll manually.

• This can be time-consuming and it is easy to make mistakes.
• Alternatively, you could outsource your payroll operations to a specialist agency. This can have expensive ongoing costs, and may offer less flexibility than running payroll yourself.

1.2 You are most likely to benefit from payroll software if you have already computerised your accounts.

• Most accounting packages provide a payroll module. This may cost extra.
• Specialist payroll software can link to different accounting packages.

1.3 If your payroll changes frequently, payroll software will be particularly helpful. This might be the case if:

• you often hire employees on short-term contracts
• employee pay is made up of several elements, such as basic pay, commission and bonuses
• you make deductions, such as pension contributions

1.4 You may need to analyse your employment costs.

• Some bespoke software may make it easier to allocate employment costs to cost centres.

1.5 To get the best out of the software, it must be kept up to date with PAYE and National Insurance legislation.

• Many payroll packages are updated regularly to take tax and legislation changes into account. You usually have to pay to receive these updates.
• Software will ensure all the forms are filled out correctly. But it cannot advise you on the best course of action.