Payroll company (UK)

How it works

A payroll company takes hours, salary changes, new starters and leavers from the client each pay period and runs the pay calculation in licensed software, usually Sage, Xero, BrightPay, IRIS or MoneySoft. The payroll company then files a Full Payment Submission to HMRC on or before payday under Real Time Information rules and an Employer Payment Summary by the 19th of the following tax month where reductions apply. Income Tax, Class 1 National Insurance, student loan deductions, Construction Industry Scheme amounts and the Apprenticeship Levy where due are then payable to HMRC by the 22nd of the next tax month per GOV.UK PAYE payment rules.

The payroll company also runs workplace pensions auto-enrolment alongside payroll. Under the GOV.UK workplace pensions employer guidance, the client employer must enrol staff aged 22 to State Pension age earning at least £10,000 a year, and the company usually files contribution schedules to NEST, The People's Pension, Smart Pension or the client's chosen provider each pay run. Annual tasks sit on the same workflow: the company prepares P60s for issue by 31 May and supports P11D expenses and benefits reporting by 6 July, per GOV.UK annual reporting.

Where the company processes pay for temporary workers placed by a recruitment agency, the Agency Workers Regulations 2010 shape the rights side of the arrangement — equal pay and conditions after twelve weeks on assignment — but the PAYE filing duty still flows through whoever pays the worker. The payroll company is the operator; the client remains the employer.

What it isn't (common confusions)

A payroll company is not an accountant. The two overlap because both touch ledgers, but a company specialises in pay-run mechanics, RTI filing and pension contribution files, while an accountant covers annual accounts, Corporation Tax and statutory filings at Companies House. Many smaller practices run both; that does not collapse them into the same service.

A payroll company is not a Professional Employer Organisation. A PEO becomes the employer of record for the staff and carries the employment liabilities. A UK payroll company does not. The client remains the legal employer, the client's PAYE scheme stays in the client's name and the client carries the liability for tax due — GOV.UK PAYE payment guidance confirms the employer is the party that owes HMRC. A payroll company filing an incorrect FPS does not move that liability; the employer corrects via the next FPS or follows the GOV.UK payroll errors process, then pursues the payroll company under the service contract.

A payroll company is not an employee benefits platform, although a growing share now resell one under their own brand. Running PAYE and running rewards are different products on different release cycles, even when the same firm sells both.

How WagePerks does this

WagePerks gives UK payroll companies a white-label employee benefits and HR portal that sits next to the pay run, not inside it. The payroll company's logo, colours, domain and app name are on every employee screen. See payroll company partner solutions for the wholesale and branding model. The base platform is £4.50 per employee per month all-in, eleven modules, white-label included, rolling monthly — partner economics on request.

Related on WagePerks

Payroll company partner solutions — wholesale and branding model
Payroll company recurring revenue and white-label benefits guide — unit economics
Learn: White-label employee benefits platform — the platform model
Pricing — base £4.50 per employee per month, partner wholesale on call

Sources

Running payroll: reporting to HMRC — GOV.UK — FPS on or before payday and EPS by the 19th, the core RTI rule a company operates inside
Pay employers' PAYE tax — GOV.UK — confirms the employer owes HMRC for PAYE, NI, student loan, CIS and Apprenticeship Levy by the 22nd of the next tax month
Workplace pensions for employers — GOV.UK — auto-enrolment thresholds (age 22 to State Pension age, £10,000) that the company applies each pay run
Annual payroll reporting — GOV.UK — P60 by 31 May, P11D / expenses and benefits by 6 July, the company's annual task list
Fix problems with running payroll — GOV.UK — the correction process the employer follows when a payroll submission is wrong
Agency Workers Regulations 2010 — legislation.gov.uk — twelve-week qualifying period for equal treatment, relevant where a company pays agency temps

Sources verified 2026-06-10. We re-verify quarterly.

Common questions

Does a payroll company file RTI with HMRC for me?

Yes. A payroll company files a Full Payment Submission on or before each payday and an Employer Payment Summary by the 19th of the following tax month where reductions apply, using the client's PAYE reference. The client remains the employer in HMRC's records and still owes the PAYE bill by the 22nd of the next tax month.

Who is liable if the company makes a PAYE error?

The client employer carries the legal liability to HMRC because the PAYE scheme is in the employer's name, not the payroll company's. The employer follows the GOV.UK payroll-errors correction process and can pursue the payroll company under the service contract for any penalty or interest the error caused. A payroll company is an operator, not the employer of record.

Why would a company add a benefits platform under its own brand?

Pay-run revenue is per-payslip and price-sensitive, while a branded benefits portal adds a second monthly fee per employee without adding a second software vendor to the client relationship. White-label keeps the company's name on the app and avoids exposing a third-party brand to clients the company spent years winning.