News & Events
Rising payroll software costs – Why outsourcing your payroll could save you money and provide peace of mind
8th August 2025
Payroll is one of the most critical functions in any business, ensuring employees are paid accurately and on time while meeting all legal and compliance obligations. However, as payroll software costs continue to rise, many businesses are re‑evaluating whether managing payroll in‑house is the most cost‑effective approach. Outsourcing is becoming an increasingly attractive alternative, offering the potential to save money, reduce administrative burden, and provide greater peace of mind. In this article, Rowleys’ Payroll Manager, Rebecca Gotch, shares more on the rising costs of payroll software and the benefits of outsourcing your payroll.
The increasing cost of payroll software
Payroll software costs have been quietly climbing for years, and the pricing models mean that increases can sneak up on you. Most providers now use a subscription plus per‑employee charge structure, so as your team grows, so does your bill.
Across the market, monthly costs typically range from £7 to £50 before adding per‑employee fees or extra modules like pensions and CIS.
What starts as an affordable monthly payment can soon become a significant annual expense, particularly once you include extra upgrades, or add-ons required for compliance. And, that’s before we even begin to look at the real hidden cost: the time you or your team spends running payroll.
The hidden costs of in-house payroll
On the surface, doing payroll in-house seems straightforward – you buy the software, input the figures, and you’re done. But in reality, there’s a lot more to it.
First, you need a member of staff (or several) who are trained to use the system correctly and keep up with HMRC changes. That training takes time and money. Then there’s the actual processing, which can take hours each month. It’s likely that this time could be spent generating revenue or serving clients. And, if that person is on holiday or off sick, payroll still needs to happen, which often means scrambling for cover.
Arguably, the biggest hidden cost is the risk of error. Payroll mistakes can lead to unhappy employees, HMRC fines, or even reputational damage. Fixing those mistakes takes time, and in some cases, money.
When you add all of this together, in-house payroll can be more costly and stressful than you might think.
The benefits of outsourcing payroll
Outsourcing payroll isn’t just about saving money, it’s about removing a recurring headache from your business.
With an outsourced service, you no longer have to worry about whether the right deductions have been made, whether you’ve met your reporting deadlines, or that you’re keeping up with the latest regulations. A specialist payroll team will do it all for you.
You also get cost efficiency – paying one fixed fee that’s often lower than the combined cost of software, staff time, and training. Plus, you free up valuable hours that your team can use to focus on other work rather than admin. Outsourcing also scales effortlessly; whether you hire one person or twenty, your provider can adjust instantly without you having to upgrade systems or train new staff.
And, because outsourced providers use their own fully compliant technology, you avoid the cost and hassle of software upgrades altogether.
Here’s what one of our clients had to say about outsourcing their Payroll to Rowleys:
“Switching to outsourcing our payroll was so much easier than we expected! The team made the transition seamless, and their friendly, helpful service has been a huge relief. Best of all, the cost was surprisingly not much more than what we were already paying for payroll software – but now we have peace of mind knowing everything is handled professionally and we have no sleepless nights over any future legislation changes”
Mark Norman @ Dupli Limited
Peace of mind and compliance assurance
When it comes to payroll, accuracy is non-negotiable. One wrong number can create a ripple effect of problems, from employees losing trust in their payslips to costly fines from HMRC.
By outsourcing, you put that responsibility in the hands of experienced professionals who process payrolls day in, day out. They’re already up to date with every legislative change, every deadline, and every compliance requirement, so you don’t have to be.
You also gain the reassurance of robust data security processes and a clear audit trail, making HMRC queries or internal reviews much less stressful. In short, outsourcing isn’t just a cost decision, it’s a risk management decision.
Is your payroll up to scratch?
If you’re unsure whether outsourcing is right for you, or you want to understand where your current payroll setup could be improved, Rowleys offers a Payroll Healthcheck.
This service is a detailed review of your payroll processes and systems. We check compliance with HMRC and pension regulations, assess the accuracy of your calculations and reporting, and look for inefficiencies that could be costing you time and money.
It’s the perfect way to review your current process and receive clear, actionable feedback on your current setup and what you might need to improve.
Get in touch
If rising payroll software costs are a concern, or if you simply want more time back in your day outsourcing could be the smarter, more cost-effective option. Get in touch with our friendly payroll team to find out more about our payroll services.