Free HMRC-compliant payroll software compared – 2024 UK guide

Looking for the best free payroll software? Managing payroll is an essential yet intricate part of running a business in the UK. Given that payroll processing must adhere to HM Revenue and Customs (HMRC) regulations, companies often seek software solutions that simplify the process while ensuring compliance.


Video: Answering your common questions about payroll prices and costs

For small to medium-sized enterprises (SMEs) and startups, the cost factor can be a significant concern. Thankfully, there are free HMRC-compliant payroll software options available.

In this article, we’ll compare a few of the best free payroll software packages in the UK.

Free payroll software compared

Software NameNumber of free employeesFeaturesCost for additional employeesProsCons
FreeAgentNo limit (with a qualifying business bank account)Comprehensive accounting & payroll, expense tracking, invoicingStarts at £19/monthAll-in-one solution, Free with certain bank accounts, Regular updatesComplex for basic needs, Costs can escalate
IRIS Payroll Basics9Payslip creation, tax computations, HMRC submissionsStarts at £10.80/monthSimple interface, Free for up to 9 employees, HMRC compliantLimited to 9 employees, Lacks advanced features
12 Cloud Payroll9Auto-enrolment, payslip generation, basic reporting£1/employee/monthCloud-based, Advanced features, User-friendlyLimited to 9 employees, Security concerns
Capium Payroll3Payroll calculations, payslip generation, basic tax deductionsStarts at £6/monthSimple and intuitive, Core functionalities, Regular updatesLimited to 3 employees, Lacks features for complex needs
Shape Payroll3Payslip generation, tax calculations, year-end reportsStarts at £5/monthUser-friendly, Basic functionalities, Quick setupLimited to 3 employees, Lacks advanced features
Primo Payroll’s Essentials Free Plus10Payslip generation, tax computations, compliance reportingStarts at £12/monthSupports up to 10 employees, Intuitive, Essential compliance reportsLimited features for complex needs, May not scale well
Enrolpay93 tiers available: Free, Assisted, and Fully ManagedAssisted service starts at £6/month for up to 4 employeesTransparent pricing with no hidden costsMobile app and holiday management not available on free plan
12Pay9Various payslip printing options, and an Auto Enrolment Module£79 + VAT per yearFree version allows up to 3 company payrolls on 1 accountNo electronic payslips with free version, extra cost for Auto Enrolment and CIS
Free payroll software compared

Criteria for comparison

When comparing software, we looked at factors such as:

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  • HMRC compliance
  • User interface and ease of use
  • Feature set
  • Customer support
  • Scalability

Best free UK payroll software



FreeAgent serves as a comprehensive accounting and payroll software package, tailored for small businesses and freelancers. It offers a wide range of features, from expense tracking and invoicing to tax calculations, in addition to payroll management.


Though FreeAgent is usually a paid service, it becomes free if you hold a business bank account with NatWest, Royal Bank of Scotland or Ulster Bank (or Mettle, as long as you engage in at least one transaction a month).

Outside of this offer, pricing starts at £19 per month for the initial 6 months, increasing to £29 per month thereafter.


  • All-in-one accounting and payroll solution, providing seamless integration.
  • Free usage available through partnerships with certain banks.
  • Regular updates and support available.


  • Could be too complex for users who only require simple payroll services.
  • Costs can escalate if you don’t qualify for the free option.


Best for small businesses looking for a comprehensive accounting package that includes payroll features.

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Further information

Read our FreeAgent payroll review or visit the website.

IRIS Payroll Basics


This software from IRIS focuses on the essentials, offering basic payroll functions like payslip creation, tax computations, and submissions to HMRC via RTI.


IRIS Payroll Basics is free but limited to up to 9 employees. For businesses that exceed this, paid plans start at £10.80 per month.


  • Uncomplicated and user-friendly interface.
  • Absolutely free for small-scale operations.
  • Complies with HMRC regulations.


  • Capped at 9 employees for the free version.
  • Lacks advanced features found in more comprehensive solutions.


An ideal choice for very small businesses with simple payroll needs.

Further information

Read our IRIS payroll review, or visit the website.

12 Cloud Payroll


Being cloud-based, 12 Cloud Payroll offers a flexible solution with functionalities like auto-enrolment, payslip generation, and basic reporting.


The software is free for up to nine employees, with additional employee pricing starting at £1 per employee per month.


  • Cloud-based architecture provides flexibility and remote access.
  • Includes more advanced features like auto-enrolment for pensions.
  • User-friendly interface.


  • Free version restricted to 9 employees.
  • Some users may find cloud-based solutions less secure.


Great for small to medium-sized businesses comfortable with cloud-based platforms and in need of advanced functionalities.

Further information

Read our 12Cloud payroll review, or visit the website.

Capium Payroll


Capium Payroll offers an intuitive platform with essential payroll features like payroll calculations, payslip generation, and basic tax deductions.


The software is free for up to three employees. Beyond that, subscriptions start at £6 per month.


  • Simplified and intuitive user interface for ease of use.
  • Includes all the core payroll functionalities needed for a small business.
  • Regular software updates.


  • Only supports up to 3 employees on the free tier.
  • May lack features for more complex payroll operations.


Best suited for micro-businesses or start-ups with a small number of employees and straightforward payroll needs.

Further information

Read our Capium payroll review or visit the website.

Shape Payroll


Shape Payroll provides a straightforward solution for payroll services, offering payslip generation, tax calculations, and year-end reports.


The software is free for up to three employees. Additional employee pricing starts at £5 per month.


  • User-friendly, easy-to-navigate interface.
  • Covers basic payroll functionalities effectively.
  • Quick setup and implementation.


  • Limited to 3 employees in the free tier.
  • Lacks advanced features for more complicated payroll scenarios.


A solid option for freelancers and micro-businesses that have basic payroll requirements.

Further information

Read our Shape payroll review or visit the website.

Primo Payroll’s Essentials Free Plus


Primo Payroll’s Essentials Free Plus offers an easy-to-use platform with basic payroll functionalities such as payslip generation, tax computations, and compliance reporting.


This free tier accommodates up to 10 employees. For additional employees, pricing starts at £12 per month.


  • Supports up to 10 employees in its free tier, higher than most other free options.
  • Intuitive interface makes it easy for beginners.
  • Provides essential compliance reports.


  • Limited range of features for complex payroll needs.
  • May not scale well for rapidly growing businesses.


A strong fit for small businesses that have up to 10 employees and need just the essential payroll functions.

Further information

Read our Primo Payroll review or visit the website.



Enrolpay offers scalable payroll services including RTI submissions, automatic payroll calculations, and workplace pension management, with a free mobile app in upper-tier plans.


Pricing starts free for self-service with up to 9 employees, assisted service from £6 per month, and managed service at £22 per month, excluding VAT.


  • Comprehensive payroll solutions for small to large businesses
  • User-friendly Employee Self Service portal
  • Transparent pricing with no hidden fees
  • Supports a wide range of payroll frequencies


  • Limited features in the free tier
  • Chargeable support for the attachment of earnings function
  • Holiday management only in the managed service tier


Enrolpay is well-suited for UK-based businesses of all sizes seeking a flexible and comprehensive payroll service with a clear cost structure.

Further information

Read our Enrolpay payroll review or visit the website.



12Pay offers HMRC-recognised payroll software with features like tax and NI calculations, RTI reporting, various payslip printing options, and an Auto Enrolment Module, catering to different business sizes.


The Express edition is free, the Premium edition costs £79+VAT per annum, and the Bureau edition is priced at £156+VAT annually, with optional modules available at additional costs.


  • Free option available for small businesses
  • Easy upgrade path as the business grows
  • Comprehensive features in paid versions
  • Supports unlimited companies and employees in the Bureau edition


  • Limited features in the free Express edition
  • Additional cost for Auto Enrolment and CIS extensions
  • No e-payslip option in the free version


12Pay is ideal for UK-based businesses of all sizes seeking a scalable payroll solution, from startups with few employees to large bureaus managing multiple payrolls.

Further information

Read our 12Pay payroll review or visit the website.

Conclusion – Best free payroll software in the UK

Choosing free payroll software in the UK involves a variety of considerations, such as the size of your workforce, the specific features you require, and any additional accounting functionalities you may need.

Whether you’re looking for a comprehensive solution like FreeAgent or a simpler, more focused platform like IRIS Payroll Basics, the market has multiple options to suit your specific business requirements.

FAQ for free payroll software

Is free payroll software really free?

Yes, some payroll software options offer genuinely free plans. However, these usually come with limitations such as the number of employees you can manage or the features available.

Is free payroll software HMRC-compliant?

Most reputable free payroll software options are HMRC-compliant. Always check this aspect before choosing a software.

What basic features can I expect from free payroll software?

You can generally expect core features like wage calculations, payslip generation, and basic tax calculations.

Can I manage pension auto-enrolment with free software?

Some free options offer pension auto-enrolment features, but not all do. Check the feature list carefully.

How many employees can I manage with free payroll software?

This varies by software. Some limit you to as few as three employees, while others may offer more flexibility.

Are free payroll software solutions cloud-based?

Most modern free payroll solutions are cloud-based, although there are some downloadable options available.

Can I integrate free payroll software with my existing accounting software?

Integration capabilities vary. Some free payroll software solutions offer seamless integration with popular accounting software, while others do not.

Is customer support available for free payroll software?

Customer support varies by provider. Some offer robust support even for free plans, while others may offer limited or no support.

Are free software solutions secure enough for payroll processing?

Reputable free payroll software solutions generally use encryption and other security measures to protect your data, but always perform your due diligence.

Can I upgrade to a paid version later?

Most free payroll software solutions offer a paid version that you can upgrade to as your business grows.

Do I need special training to use free payroll software?

Most free payroll software is designed to be user-friendly, but the level of ease varies. Some may offer free tutorials or guides.

Is it easy to migrate data from one free payroll software to another?

Data migration capabilities depend on the software. Some make it easy to export and import data, while others might not.

Can I file HMRC submissions directly through the software?

Most HMRC-compliant free payroll software will allow you to file submissions directly.

Will free payroll software handle year-end tax forms?

This varies by software. Check the feature list to see if year-end tax forms are included.

Can I handle bonuses, commissions, and overtime with free payroll software?

Some free software options provide features for bonuses, commissions, and overtime, while others might not.

Can I run multiple pay schedules with free payroll software?

Free software may limit you to a single pay schedule. Check the limitations before choosing a software.

Is free payroll software suitable for freelancers?

Some free payroll software options are suitable for freelancers, particularly those that integrate with accounting software.

How often is the software updated for regulatory changes?

Most reputable free payroll software is regularly updated for tax tables and other regulatory changes.

Can I customise payslips in free payroll software?

Customisation options vary. Some free versions allow basic customisation, while others do not.

Is mobile access available for free payroll software?

This varies by software. Some offer mobile apps or mobile-friendly websites, while others may require you to use a desktop for payroll processing.

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