Author Profile Picture

Jamie Lawrence


Insights Director

Read more about Jamie Lawrence

Free payroll software recognised by HMRC


Small companies do not need to shell out for payroll software – many packages are available free, are feature-rich, regularly updated and crucially they integrate with HMRC so that organisations that stay compliant with RTI requirements. Take a look at our pick from the free packages below.

Express by 12Pay

Key features of 12Pay Express include printing key HMRC documents, such as P45s, on blank or HMRC paper.

Payslips do not need special stationery and can be printed on normal paper. Express can handle auto-enrolment and works with an unlimited number of employees.

Although you never have to pay for the free version, an annual license costs £56 (October 2015) and includes additional features such as internet filing of Real Time Information (RTI) with HMRC for more than 10 employees, reporting and use of ‘smart’ payroll layouts.

BrightPay Free by BrightPay

Brightpay Free is limited to three employees but all features are enabled as standard, alongside telephone and email support.

The software supports all RTI submission types and a range of payment schedules – weekly, fortnightly, 4-weekly and monthly.

BrightPay Free allows you to print, email, and export payslips, process holiday pay, run auto-enrolment schemes and work with a variety of pay types, including basic, daily, hourly and Statutory. You can print P45, P60, P30 and P32 forms.

Different employees can be paid on different dates and the reporting system can be customised to provide the information you need.

Capium Payroll by Capium

For organisations with up to three employees, Capium Payroll is free of charge. It’s a cloud-based system that benefits from regular updates so that the package remains consistently compliant.

Data is encrypted and new employees can be added using a wizard system to make the process easier. Batch payroll allows you to streamline the process of paying all employees, while you can use the varying pay frequencies feature if you have a diverse worker base.

There’s an online help centre for advice and, usefully, payslips can be sent electronically for security or environmental reasons. Leave and holiday calculations are made automatically.

Basic PAYE Tools by HMRC

Free software direct from HMRC for organisations with fewer than 10 employees, Basic PAYE Tools offers functionality for most common payroll tasks but there are limitations – you can’t produce payslips, for example, but it can interface with other payroll technology.

Basic PAYE Tools can help perform tasks that other payroll software can’t do, for example sending an Employer Payment Summary (EPS) or sending an Earlier Year Update (EYU).

The latest version of Basic PAYE Tools is updated automatically, for example for new tax years.

IRIS Payroll Basics by IRIS Software

Free for companies with 10 employees or fewer, IRIS Payroll Basics automatically calculates PAYE, NI and all statutory payments.

It includes summary reports out of the box and can print payslips for free for 30 days as well as provide electronic payslips. Updates – both legislative and software-related – are provided and the whole package is fully compliant with RTI requirements.

Kashflow Payroll by IRIS Software

The Kashflow Payroll package comes fully-featured and free for organisations with 10 or fewer employees, although you can’t print payslips and there’s a maximum of one item per payslip.

The package has a range of decent features including the ability to run weekly and monthly payrolls at the same time. You can create employee calendars to keep track of illnesses and holiday and all reporting can be exported in both CSV and Excel files. The package can run auto-enrolment schemes too.

Free Payroll Star/Free Payroll Bureau/Free Payroll with CIS by Payroo

These cloud-based solutions offer both payroll and auto-enrolment functionality and all RTI submissions are compiled automatically.

Free Payroll Star provides costings reports as well as comprehensive reporting and all data can be exported to CSV and XML files. Salary sacrifice is also available.

Free Payroll with CIS is specifically designed for those who work in the construction industry.

One Response

  1. Dear Mr Lawrence
    Dear Mr Lawrence
    I am in the process of setting up my payroll
    I am a contractor and I would like to know which would be the best solution for me for the above listed softwares
    Thank you very much in advance for your support

Author Profile Picture
Jamie Lawrence

Insights Director

Read more from Jamie Lawrence

Get the latest from HRZone.

Subscribe to expert insights on how to create a better workplace for both your business and its people.


Thank you.