Free payroll software for employers with fewer than 10 employees
acrenvo.com/guides/free-payroll-software-small-employers, last reviewed 21 October 2026
Grace is fictional. Grace lets property as a sole trader and has taken on one part-time employee to keep the books and answer tenants’ calls. With a single member of staff, Grace would rather run payroll in-house than pay a bureau, and has heard that HMRC lists free payroll software for small employers. Grace wants to know what that list is, whether a free product will do the job, and what to check first.
What HMRC’s list is
HMRC publishes a single list of payroll software that can report to it, and introduces it like this: “This payroll software is recognised by HMRC. You can use it to report PAYE to us online.”
Free products sit in their own part of the list, at the top. This free payroll software is recognised by HMRC for businesses with fewer than 10 employees. The rest of the list is paid-for software. When we read the list on 21 October 2026, its free part held seven products from seven suppliers. HMRC updates the list from time to time, so that number can change.
HMRC says: “HMRC cannot recommend one product or service over another. We’re also not responsible for any problems you have with software you’ve bought.”
The list names each supplier and product and gives nothing else, so it shows no prices, features or limits. We have not checked any payroll products ourselves yet, which is why this guide names none of them. HMRC’s list of recognised payroll software is the place to start.
What payroll software has to do
Whatever it costs, the software does the same core job. If you decide to run payroll yourself, you need payroll software to report to HM Revenue and Customs (HMRC). The software will help you with tasks like:
- recording your employees’ details
- working out your employees’ pay and deductions
- reporting payroll information to HMRC
- working out how much you need to pay HMRC
- calculating statutory pay, for example maternity or sick pay
You must get payroll software that reports PAYE information online, unless you’re exempt.
What to check before you choose
HMRC’s advice is to start from what you need. You should consider which features you need and check the software you choose has those features. GOV.UK gives some examples of what products can leave out. You should also consider which other features you need. For example, some software will not let you:
- produce payslips
- record pension deductions
- make pension payments
- pay different people over different periods (for example both weekly and monthly)
- send an Employer Payment Summary (EPS) report or Earlier Year Update (EYU) to HMRC
Payslips are a duty in their own right, so it matters whether the software produces them. You must give your employees and your ‘workers’ a payslip on or before their payday. You may be able to produce payslips using your payroll software, if it has this feature. You can use different software if it does not.
Pensions are the other point to check, because the pension duty starts with the first employee. The Pensions Regulator says: “Payroll software that is set up for automatic enrolment may be able to calculate contributions for you and make the correct deductions from staff pay.” The guide to workplace pensions and payroll explains that duty.
For Grace, that becomes a short list of questions to put to each supplier on HMRC’s list: whether the free product produces payslips, whether it records and pays pension contributions, and whether it can send an Employer Payment Summary. Each supplier’s own site is the place to confirm what its free product includes and any conditions that come with it.
If you change software later
Moving from one product to another needs some care with employee records. Some payroll software will not let you continue with the same employee Payroll IDs if you’ve already used them in other software. If your payroll software does not let you do this, put ‘Yes’ in the ‘Payroll ID changed indicator’ for each employee in your Full Payment Submission (FPS).
Your PAYE bill may be calculated incorrectly, and payroll records duplicated, if you do not.
If you cannot use software at all
Online reporting is the rule, with narrow exceptions. You may be exempt from reporting payroll online if:
- you’re prevented from using a computer on religious grounds
- you’re getting care or support services for yourself or a member of your family
- you’re unable to send reports electronically because you’re disabled, elderly or cannot access the internet
A small number of employers have the option of sending payroll submissions to HMRC on paper. If you think you may be exempt and wish to file on paper, write to HMRC with full details for your application to be considered.
Questions about free payroll software
Does HMRC recommend any of the free products?
HMRC stays neutral about the products it lists, and says so: “HMRC cannot recommend one product or service over another. We’re also not responsible for any problems you have with software you’ve bought.”
What should I check before choosing a free product?
HMRC's advice is to match the software to what you need. You should consider which features you need and check the software you choose has those features. GOV.UK gives examples of what some software will not do, such as produce payslips, record pension deductions or make pension payments.
Does Acrenvo compare payroll products or their prices?
We have not checked any payroll products ourselves yet, so this section names none of them and shows no prices. HMRC's list is the place to start, and each supplier's own site sets out its terms.
What should I know if I change payroll software later?
Your employees' payroll IDs may not carry across. Some payroll software will not let you continue with the same employee Payroll IDs if you’ve already used them in other software. If your payroll software does not let you do this, put ‘Yes’ in the ‘Payroll ID changed indicator’ for each employee in your Full Payment Submission (FPS). Your PAYE bill may be calculated incorrectly, and payroll records duplicated, if you do not.
More in: Payroll for small employers
Next in this stage
Payroll deadlines and penalties: what happens if you report or pay late
Send each payroll report on or before payday and pay HMRC by the 22nd of the month, or the 19th if paying by post. A late report can cost £100 to £400 a month, by number of employees.
Other guides in this stage
Sources
This is general information, not tax, payroll, pensions or legal advice. For advice on your own business, speak to an accountant, a payroll adviser or a tax adviser.