Running payroll shouldn’t drain your time or your budget.
Yet for many small businesses in London, payroll quickly becomes one of the most expensive and stressful admin tasks: software costs, compliance risks, staff queries, HMRC deadlines… it all adds up.
This guide explains what affordable payroll services really look like, how to assess whether you’re overpaying, and why outsourcing can give small businesses both quality and savings without compromising compliance.
Written with the perspective of AccounTax Zone — specialists supporting SMEs across London.
Why Small Businesses Need Affordable Payroll Services
Small businesses often face a unique challenge:
You need payroll that is accurate, compliant and on time, but you don’t need a full in-house payroll officer.
Common issues small businesses come to us with:
- Paying high monthly fees for simple payroll
- Wasting hours every month processing wages manually
- Risk of HMRC penalties from late submissions
- Confusion around PAYE, RTI and pensions auto-enrolment
- Software subscriptions becoming too expensive
- Incorrect payslips or tax codes causing employee frustrations
Affordable payroll services solve these issues by giving you professional support at a realistic cost, tailored to the size of your team.
What “Affordable Payroll Services” Really Means
Affordable doesn’t mean cheap or low quality.
For small businesses, it means:
- Fixed monthly pricing: No hidden charges for re-runs, starters, leavers or reports.
- Scalable as your team grows: Pay only for the number of employees.
- HMRC-compliant processes: RTI submissions, pension filings, tax calculations – all handled correctly.
- No need for payroll software: All tools and systems are included.
- Advice when you need it: Basic payroll queries answered without extra billing.
When priced and delivered properly, payroll should cost less than the time you’d spend doing it yourself, and significantly less than hiring internal staff.
How Much Should Payroll Cost for a Small Business in London?
Costs vary by provider, but typical market rates are:
| Number of Employees | Average Market Cost | What Affordable Pricing Looks Like |
| 1–5 employees | £35–£40 per month | £25–£35 per month |
| 6–10 employees | £42–£70 per month | £35–£60 per month |
| 11–20 employees | £77–£140 per month | £66–£120 per month |
Affordable payroll services keep pricing transparent, without extra charges for:
- P45/P46
- Digital payslips
- RTI submissions
- Pension auto-enrolment compliance
- Annual preparation (P60/P11D support)*
(*P11D may be extra depending on provider.)
What’s Included in an Affordable Payroll Package?
A properly designed small-business payroll service should cover:
1. Monthly payroll processing
Wages, tax, NIC, student loans, SSP/SMP and more.
2. Real Time Information (RTI) submissions
Filed with HMRC every pay period.
3. Payslips
Digital, secure and accurate.
4. Auto-enrolment pensions
Assessment, contributions, compliance and submissions.
5. Starters and leavers
P45, P46 and onboarding forms without additional fees.
6. Year-end submissions
P60s for staff and final declarations.
7. Basic payroll advice
Guidance on tax codes, pay queries and HMRC notices.
This is usually all a small business needs — keeping the service affordable while staying fully compliant.
Why Outsourcing Payroll Is More Affordable Than In-House
Many small businesses assume doing payroll themselves is cheaper.
But when you add up:
- Time spent each month
- Cost of payroll software
- Risk of mistakes or penalties
- Keeping up with constant HMRC changes
Outsourcing becomes the more cost-effective choice.
Time saved quickly translates into money saved.
Why London Small Businesses Prefer Outsourcing to Specialists
London SMEs operate in a fast-paced environment where margins, compliance and staff expectations are higher.
Affordable payroll services give you:
- Support tailored to London regulations
- Fast response times
- Help with HMRC letters and tax code updates
- Cleaner internal systems for lenders, investors or audits
Small businesses gain all the benefits of a finance function at a fraction of the cost.
How to Choose Affordable Payroll Services (Checklist)
- Clear, fixed monthly pricing
- Experience specifically with small businesses
- Flexible pay cycles (weekly, monthly, fortnightly)
- Strong focus on compliance
- Helpful support, not automated or generic
- Strong data security systems
Example: A London Café With 4 Staff
Before outsourcing:
- Paying £100+ monthly for software and accountant
- Owner spent several hours a month doing payroll
- Frequent errors with tax codes
- Staff received payslips late
After switching to an affordable outsourced service:
- Fixed cost: around £35 per month
- No need for payroll software
- All RTI and pension submissions handled
- Staff received payslips on time
- Owner saved around 40 hours per year
This is a typical outcome for micro-businesses.
Final Thoughts
Affordable payroll services are not about cutting corners.
They are about giving London small businesses reliable, compliant and efficient payroll support without unnecessary costs.
When done properly, outsourcing payroll reduces admin burden, improves accuracy and frees up your time to run and grow your business.
If You Want to Explore Affordable Payroll Options
If you’d like to understand what an affordable payroll setup might look like for your small business, AccounTax Zone can guide you through the options and help you choose what fits your budget.
