Do I need an accountant for payroll?
When a business takes on employees, payroll becomes part of the equation. It sounds simple — pay your staff, deduct tax, send it off to HMRC. But, as most business owners quickly discover, payroll isn’t always straightforward.
So, the question arises: Do you need an accountant to handle payroll, or can you do it yourself? The answer depends on how confident you are with numbers, regulations, and deadlines — as well as how much time you want to spend dealing with it.
What Is Payroll?
Payroll refers to the entire process of:
Calculating employee pay (gross and net)
Deducting tax, National Insurance (NI), and other contributions
Reporting to HMRC through Real Time Information (RTI)
Paying employees and HMRC correctly and on time
Handling pensions, holiday pay, sick pay, parental leave, and statutory payments
It’s a legal requirement for any employer in the UK to run payroll accurately.
What Are the Employer’s Responsibilities?
If you employ staff, even just one person, you are responsible for:
Registering as an employer with HMRC
Setting up payroll software
Making tax and NI deductions from salaries
Submitting Full Payment Submissions (FPS) to HMRC every time you pay staff
Paying HMRC by the 22nd of the following month (if paying electronically)
Managing auto-enrolment pension contributions
Providing payslips
Handling statutory payments like sick pay or maternity pay
Issuing P60s at year-end and P45s when someone leaves
Missing deadlines or making mistakes can result in penalties and interest.
Can You Do Payroll Yourself?
Yes, it’s entirely legal to run your own payroll. HMRC offers free basic payroll software for businesses with fewer than 10 employees. There are also many commercial payroll software providers with user-friendly interfaces.
However, doing it yourself means:
Keeping up to date with tax code changes, NI thresholds, and legal updates
Understanding how to handle things like sick pay, maternity pay, student loans, and tax code adjustments
Managing pension auto-enrolment correctly
Staying on top of HMRC deadlines every month and at year-end
For very small businesses with straightforward payroll, DIY payroll can work — but there’s a learning curve.
What’s the Risk of Getting Payroll Wrong?
Payroll mistakes can be costly. Common errors include:
Paying the wrong tax or NI
Using the wrong tax code
Missing HMRC submissions
Forgetting to enrol employees in a pension scheme
Incorrectly calculating holiday pay or sick pay
Mistakes can lead to:
HMRC penalties for late filing or payment
Unhappy employees (underpaid or overpaid)
Time spent correcting errors, sometimes with HMRC involvement
Legal disputes if statutory entitlements aren’t handled correctly
In some cases, businesses have accidentally overpaid HMRC for months before realising.
When Might You Not Need an Accountant for Payroll?
If you’re a sole trader with no employees. You don’t need payroll at all for yourself — just pay yourself from the profits.
If you only pay yourself as a company director below the tax and NI thresholds, some micro-business owners handle this themselves with simple payroll setups.
If you’re confident with payroll software. Some cloud-based tools automate most calculations, though you still need to understand the rules.
When Is It Sensible to Use an Accountant or Payroll Provider?
You have multiple employees. The more staff you have, the more complex payroll becomes — dealing with new starters, leavers, holidays, bonuses, and varying hours.
Staff receive variable pay. If wages change due to overtime, commissions, or bonuses, calculations get more complicated.
You’re unsure about pensions. Auto-enrolment rules are strict, and getting it wrong can lead to penalties from The Pensions Regulator.
You don’t want to deal with HMRC admin. Accountants or payroll bureaus file the necessary reports and calculate payments for you.
You want to avoid errors. Professional payroll providers are responsible for accuracy, and many carry professional indemnity insurance.
You want your time back. Payroll, while critical, isn’t usually a high-value task for business owners to handle themselves.
What Does an Accountant Typically Do for Payroll?
An accountant or payroll bureau typically handles:
Setting up payroll systems and registering the business as an employer
Running payroll each week or month
Calculating gross and net pay, deductions, and employer liabilities
Filing Real Time Information (RTI) submissions with HMRC
Producing payslips for employees
Handling student loans, maternity pay, sick pay, and tax code updates
Managing year-end payroll processes (like P60s)
Dealing with starters (P45s) and leavers
Advising on payroll-related tax efficiencies where relevant
How Much Does Payroll Cost Through an Accountant?
The cost varies based on the number of employees and complexity. Typical pricing structures might be:
£5–£10 per payslip
Or £25–£100+ per month for a small business payroll service
Some accountants bundle payroll into their monthly service fees. Larger companies with more staff may pay more, while micro-businesses often pay less.
Is Payroll Included in Accounting Software?
Many modern accounting software providers (like Xero, QuickBooks, and Sage) offer payroll as an add-on. These systems can:
Automatically calculate PAYE, NI, and pensions
Generate payslips
File directly with HMRC
However, while software simplifies the process, it doesn’t eliminate the need to understand the rules and deadlines. Some businesses still prefer their accountant to oversee payroll even when using integrated software.
What About Outsourcing to a Payroll Bureau?
A payroll bureau is a specialist provider that focuses solely on payroll rather than full accounting. They perform the same functions as an accountant’s payroll service but might offer slightly cheaper rates, particularly for businesses with larger staff numbers.
Conclusion
Whether you need an accountant for payroll depends on your confidence, time, and the complexity of your workforce. While DIY payroll works for some very small businesses, the risks of mistakes — combined with the burden of staying on top of regulations — often mean that outsourcing to an accountant or payroll bureau is the more efficient and less stressful route.
It’s about weighing the cost against the peace of mind and the time it frees up to focus on running your business.
