James

📢 Guide Updated — May 2026

We've completely overhauled this payroll software guide to reflect the major changes affecting UK small businesses in 2026. The employer NIC rate increased to 15% in April 2025, the Secondary Threshold dropped to £5,000, and the Employment Allowance rose to £10,500 — all of which change how payroll software calculates your costs. We've also updated every pricing entry (Sage is now £20/month, not £7), removed Gusto (which lacks proper UK payroll features), and added BrightPay, Moneysoft, Employment Hero, and PayFit — four of the strongest small business payroll software options that were missing from the original guide. New sections cover how to switch payroll provider without disrupting your PAYE submissions, common HMRC compliance mistakes to avoid, and the upcoming mandatory payrolling of benefits in kind from April 2027. Whether you're looking for free payroll software for a micro-business, the best HMRC-compliant payroll platform for a growing team, or an international payroll solution, the comparison is now fully current for the 2026/27 tax year.

We are working to revamp this article, add more content, new providers, recommendations and hands on reviews from startups in our networks. So if you're an avid user of payroll software for startups please get in touch!

I have updated this guide with more valuable information, added an FAQ (Frequently Asked Questions) and revamped some of the information to make it easier to digest! If you're trying to find out how to register a company in the UK then this should help you!

Thanks Ricardo! BreatheHR are a great option - there are quite a few hr systems for small business out there, since creating this article had quite a few reach out to me haha. Trying to keep this guide affiliate free and just focus on the good, bad and ugly of real hr systems that small businesses use - gotta keep it real here.

On 08/01/2025 at 14:07, Rushika Shirish said:

Love this - hr software can be a real pain - laying out the best hr software for small businesses was a great idea! Thanks James.

It absolutely can! I’m considering adding some research papers on HR to strengthen the argument I’m making here—HR software for small businesses is incredibly important. In fact, HR software for startups is essential right from the beginning of their journey!

We created this guide to emphasize these key points and highlight why investing in the right HR tools early on is a game-changer.

Love this - I'm terrible with names! I'm happy we settled with Startup Networks! 

51 minutes ago, Maria Vichi said:

Very useful info !

Thank you, appreciate your comments!