Best Free Payroll Software for UK Small Businesses in 2023

by Antonia Zivcic
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Managing payroll efficiently is a crucial aspect of any business, ensuring that employees are paid accurately and on time. For small businesses in the UK, finding cost-effective solutions is essential to streamline operations. In the digital age, free payroll software options have emerged, offering valuable tools to manage payroll without breaking the bank. Here, we’ll explore some of the best free payroll software options for UK small businesses in 2023.


1. Payroo

Payroo is a cloud-based payroll software designed specifically for small businesses in the UK. It offers an easy-to-use interface and provides all the necessary features to manage payroll effectively. With Payroo, you can calculate PAYE (Pay As You Earn) taxes, National Insurance contributions, and generate payslips effortlessly. Additionally, the software handles real-time information submissions to HMRC, ensuring compliance with tax regulations. The free version of Payroo supports up to 10 employees, making it a suitable choice for small businesses.

2. HMRC Basic PAYE Tools

For businesses with very simple payroll needs, the HMRC Basic PAYE Tools can be an excellent choice. This free desktop application provided by the UK government helps you manage payroll, calculate taxes, and submit information directly to HMRC. While it may lack the advanced features of some paid software, it’s a reliable option for small businesses with a limited number of employees.

3. BrightPay

BrightPay offers a free version of its payroll software that caters to the needs of small businesses in the UK. It supports up to three employees, making it ideal for startups and micro-businesses. The software is user-friendly and provides features like automatic enrolment for workplace pensions, electronic payslip distribution, and tax calculations. BrightPay’s free version offers a glimpse into the capabilities of its paid versions, which may be beneficial as your business grows.

4. GnuCash

While primarily known as accounting software, GnuCash also offers payroll functionality, making it a versatile choice for small businesses. GnuCash enables you to track income and expenses, manage accounts, and generate financial reports. The payroll features allow you to create employee records, track working hours, and calculate salaries. While GnuCash may not be as streamlined for payroll as dedicated payroll software, it’s flexibility and wide range of features make it a powerful tool for small businesses that require both accounting and basic payroll capabilities.

5. Wave

Wave is a comprehensive financial software that includes accounting, invoicing, and payroll features. While the payroll functionality is not available in all countries, it does support payroll for the UK. Wave’s payroll features include automated tax calculations, direct deposits, and payslip generation. The software can handle both employee and contractor payments. While not entirely free – as Wave offers additional paid services – its payroll capabilities are available at no cost, making it an attractive option for small businesses seeking an all-in-one financial solution.

6. PayFit

PayFit offers a free payroll software solution specifically designed for small businesses in the UK. It provides features like automated payroll calculations, HMRC submissions, and employee self-service options. PayFit aims to simplify the payroll process and reduce the administrative burden on businesses. The free version supports up to five employees, making it suitable for startups and small teams.

7. eSlip

eSlip is a cloud-based payroll solution that offers a free version for small businesses with fewer than five employees. It provides essential features such as payroll calculations, tax deductions, and online payslip distribution. eSlip’s user-friendly interface makes it easy to navigate, even for those with limited payroll experience.


Managing payroll effectively is essential for the smooth operation of any business, regardless of its size. Fortunately, there are several free payroll software options available for UK small businesses in 2023. These tools offer features ranging from basic payroll calculations and tax submissions to more comprehensive functionalities.

Before choosing free payroll software, consider your business’s specific needs and the number of employees you have. As your business grows, you might find it beneficial to transition to a paid version of the software or explore other paid payroll solutions that offer advanced features and scalability.

Remember that while these free options can be incredibly helpful, they might have limitations compared to their paid counterparts. However, they can be a great starting point for small businesses looking to streamline their payroll processes without incurring additional costs. Always ensure that the payment tools you choose align with your business’s requirements and are compliant with the latest tax regulations in the UK.

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