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How to choose a payroll bureau in the UK

To choose a payroll bureau, start with what you need it to do. Then compare providers on:

the checks they carry out before each payroll
who will actually run it
how they handle HMRC and pension filings
what support you get on payday
how service is measured and reported
how they protect your data
what the contract covers

The legal responsibility for PAYE stays with you, so choose a provider whose process you understand and trust.

How do you choose a payroll bureau?

Compare providers on the same written brief, not on headline claims. Give each one the same picture of your payroll, ask the same questions, and compare their written answers. The sections below set out what to ask and why.

Start with what you need it to do

Write down your payroll before you speak to anyone. Include:

how many people you pay, and how often
your pension arrangements
variable pay and statutory payments
how often people join and leave
the payroll system you use today

Decide what you want the bureau to do and what you want to keep in-house. Is it the whole process, from checking to filing, or specific tasks such as year-end or benefits reporting? A clear brief makes the proposals comparable. If you're still deciding whether to use a bureau at all, start with what a payroll bureau does, and when it makes sense.

Ask what checks happen before each payroll

Ask the provider to walk you through one normal payroll run, step by step. Listen for:

how it checks the information you send
whether it checks the payroll against your own policies as well as UK legislation
how it handles exceptions
what it gives you to approve before anything is processed

A clear sign-off report before processing is a good sign. Our guide to the checks that should happen before every payroll run gives a list you can compare against.

Ask, too, whether the provider works to your payroll timetable and supports all your pay cycles, or whether you'll need to fit around its own schedule.

Ask who will run your payroll

Find out who will actually do the work and what payroll experience they have. Ask whether you'll have a dedicated team or named contacts, how cover works during holidays and absence, and how problems are escalated.

If a provider mentions professional qualifications or memberships, ask what they are and who holds them. The Chartered Institute of Payroll Professionals (CIPP) describes itself as the Chartered body for professionals working in the pay industry. Where a credential matters to you, check it with the issuing body.

Ask how HMRC and pension filings work

Ask exactly which returns the bureau will file, and when. The Full Payment Submission must be sent to HMRC on or before payday, so ask:

how the provider makes sure that happens
what happens if your information arrives late
how corrections are handled

For pensions, ask what the bureau sends to your pension provider each pay period, and how it supports your auto-enrolment duties. The Pensions Regulator says employers must pay the contributions due every time they run payroll.

Ask about year-end too. Who prepares the final report of the year, the P60s and the P11Ds, and when?

Ask about payday, corrections and payments

Payday is when problems surface. Ask:

Who answers the phone on payday, and how are employee queries logged and tracked?
How are mistakes corrected? Can the provider run a supplementary payroll, and how quickly?
How are payments made? Ask whether urgent payments can go by Faster Payments, and whether the provider reconciles payroll after each run.
Can it provide printed payslips if some of your staff need them?

Ask about service levels and reporting

Ask how the service is measured:

How do you raise a query, and is there a portal or ticketing system that tracks it?
What service levels apply, and how will you see whether they're being met?

Regular reporting against agreed service levels, monthly for example, gives you evidence rather than reassurance.

Be clear about what stays with you

Agree in writing who does what. As an employer, you're legally responsible for completing all PAYE tasks, even if you pay someone else to do them, and for collecting and keeping your employees' records. Ask the provider for its deadlines for receiving information, the sign-off steps it expects from you, and how employee queries are handled.

Check software, data and security

Software: ask which payroll software the provider uses, and whether it can work with your existing system or needs you to move. GOV.UK publishes a list of HMRC-recognised payroll software, while noting that HMRC cannot recommend one product over another.

Data protection: payroll data is personal data. Data protection rules require it to be kept secure, accurate and up to date. Ask how your data is sent, stored and protected, who can access it, and what happens to your data and records if you leave.

Certifications: ask which security and quality certifications the provider holds, and check that they're current. Two common ones are:

ISO 9001: the international standard for quality management.
Cyber Essentials [⚠ CE note]: the government-backed minimum standard of cyber security, developed by the National Cyber Security Centre. You can check whether an organisation's certificate is current on the official certificate search.

Understand the contract

Read the scope, the pricing structure, the extras and the exit terms before you sign. Ask for an itemised proposal that shows what's included and what costs extra, such as additional or supplementary runs, corrections or year-end work. Check the initial term, the notice period, how fees change, and what you'll get back at the end. Ask what happens if a deadline is missed, and who is liable.

Questions to ask a payroll bureau

What exactly will you do each pay period, and what will we still do?
Do you support our pay cycles and work to our payroll timetable?
How do you validate and check each payroll before processing?
Do you check the payroll against our own policies as well as UK legislation?
What will we receive to sign off before processing?
Who will run our payroll, and what payroll experience do they have?
Which returns will you file with HMRC and our pension providers?
Who handles year-end and P11Ds?
Who answers queries on payday, and how are they tracked?
How are corrections and supplementary runs handled?
What service levels apply, and how do you report against them?
What software do you use, and can you work with our current system?
How is our data protected, and which certifications do you hold?
What extra services are available, and how are they agreed?
What are the contract term, notice period and exit arrangements?

How VIPs measures up

VIPs (Vision Integrated Payroll Service) is Vision ERP's managed payroll bureau service for organisations in all sectors across the UK. Here is how it answers many of the questions above:

Pay cycles and timetable: we support all pay cycles, mainly monthly, and work to your payroll timetable.
Checks and sign-off: a dedicated team of CIPP-experienced staff validates and interrogates each payroll, and checks it against your organisation's own policies and UK legislation. You receive a sign-off report before processing.
Processing and filing: we process the payroll, make sure payments are accurate, and file returns with HMRC and pension providers.
Additional services: P11Ds, year-end and auto-enrolment.
Payday and corrections:
- On payday we take your phone calls.
- We handle corrections and supplementary runs, Faster Payments and reconciliations, with printed payslips if needed.
Service levels: queries are logged through our service management portal, which supports monthly SLA reporting.
Software: payroll runs on Unit4 HR & Payroll. If your organisation doesn't use Unit4 Payroll, we can run it on our own systems.
Certifications: Vision ERP holds ISO 9001 certification for quality management and Cyber Essentials certification for security [⚠ CE note].

See how VIPs works

Frequently asked questions

Am I still responsible for PAYE if I use a payroll bureau?
Yes. GOV.UK says employers are legally responsible for completing all PAYE tasks, even if they pay someone else to do them.

What is the CIPP?
The Chartered Institute of Payroll Professionals, which describes itself as the Chartered body for professionals working in the pay industry.

Should a payroll bureau use HMRC-recognised software?
It's a reasonable question to ask. GOV.UK publishes a list of HMRC-recognised payroll software, although HMRC cannot recommend one product over another.

What should I give a payroll bureau to get a proposal?
A written brief covering how many people you pay, your pay cycles, pension arrangements, variable pay, statutory payments, your current payroll system, and which tasks you want the bureau to do.

How can I check a provider's service is working?
Ask how queries are logged and tracked, which service levels apply, and how often you'll receive reporting against them.

Talk to us

Comparing payroll bureaus? See how VIPs works, or contact Vision ERP and ask us any of the questions above.