The short answer
Outsourced payroll services for a small Kent business typically cost around £4 to £10 per employee per month, with most providers charging a minimum monthly fee of roughly £25 to £60 for one to five staff. That price should cover payslips, PAYE and RTI submissions to HMRC, and P45s and P60s. Pension auto-enrolment, CIS, P11Ds and year-end extras are often billed separately, so always ask what is in the quote. You should consider outsourcing as soon as payroll takes more than an hour or two a month, or the first time you employ someone.
The rest of this guide explains what you are actually paying for, the 2026/27 rates that matter, and how to choose a payroll provider in Medway or Kent without being caught out.
What do payroll services actually do?
Payroll is the process of paying your people correctly and telling HMRC about it every time. A payroll service, whether it is a bureau, an accountant or a bookkeeper, takes that job off your desk. Each pay run they will usually:
- Calculate gross pay, income tax, employee and employer National Insurance, student loan deductions and pension contributions
- Produce payslips and send them to your staff
- Submit your Full Payment Submission to HMRC on or before payday (this is the “real time information” or RTI part)
- Tell you how much to pay HMRC, and by when
- Handle starters, leavers, P45s, statutory sick pay and statutory parental pay
- Run the year-end, including P60s and your final submission
If you pay yourself through a limited company, your own director’s salary is payroll too. We explain how that fits with dividends in our guide to accountants, bookkeepers and what each costs.
How much do payroll services cost in Kent?
Payroll fees follow the number of employees and how often you pay them, not your postcode. These are indicative UK market ranges from published bureau pricing guides, not Acey quotes.
| Business size | Typical monthly cost | Approx. per employee |
|---|---|---|
| 1 to 5 employees | £25 to £60 | £5 to £12 |
| 6 to 15 employees | £60 to £150 | £4 to £10 |
| 16 to 40 employees | £150 to £400 | £4 to £8 |
| 41 to 100 employees | £400 to £900 | £3 to £7 |
Common extras to look for in a quote:
| Extra | Typical price |
|---|---|
| Weekly pay runs | £2 to £5 per employee per run |
| Pension auto-enrolment handling | £10 to £20 a month |
| Year-end reports (beyond P60s) | £25 to £50 flat fee |
| One-off set-up | £25 to £100 |
| Specialist or one-off work (hourly) | £40 to £100 an hour |
CIS deductions and P11D benefits reporting also tend to cost extra, but published prices vary widely, so get them in writing. If you already use Xero, it is worth comparing a bureau with Xero’s own payroll add-on. Our Xero payroll pricing guide sets out the current costs.
What does it really cost to employ someone in 2026/27?
Your payroll provider’s fee is the small part. The bigger numbers are the ones HMRC and the pension provider receive. These are the 2026/27 rates to plan around:
- Employer National Insurance: 15% on pay above £5,000 a year per employee. The thresholds are frozen until 2030/31.
- Employment Allowance: £10,500 off your employer NI bill. The old £100,000 eligibility cap has been removed, but a company with a single employee who is also the director usually cannot claim it.
- National Living Wage: £12.71 an hour for those aged 21 and over, and £10.85 for 18 to 20 year olds.
- Workplace pension: minimum total contribution of 8% of qualifying earnings, of which your business pays at least 3%.
Here is a worked example. You hire one full-time employee on £30,000 a year. Employer NI is 15% of £25,000, which is £3,750. Employer pension at 3% of qualifying earnings is roughly £700. Add the salary and the real annual cost is about £34,450 before any other benefits, and before the Employment Allowance reduces the NI part. That is the number to check against your pricing and cash flow, not the headline salary.
What changed in the Autumn Budget 2026 for employers?
The Budget on 28 October 2026 did not raise the headline rates of income tax, National Insurance or VAT. The points that do affect payroll are:
- The National Living Wage rises 3.9% to £13.21 an hour from 1 April 2027, and the 18 to 20 rate rises to £11.27.
- The mileage rate for the first 10,000 business miles stays at 55p, and the rate above 10,000 miles rises from 25p to 35p from 6 April 2027.
- Payrolling of benefits in kind such as company cars and private medical insurance becomes mandatory from April 2027. This replaces the year-end P11D for those benefits, so your payroll set-up needs to be ready.
- Salary-sacrificed pension contributions above £2,000 a year stop being NI exempt from April 2029.
Anything with a date in April 2027 is worth putting in the diary now. Wage rises feed straight into your payroll costs, and the benefits change means a bookkeeper or payroll provider needs to be able to run those items through the pay run.
Should I outsource payroll or run it myself?
| Do it yourself | Outsourced payroll | |
|---|---|---|
| Cost | Software from a few pounds a month, plus your time | Roughly £4 to £10 per employee per month |
| Your time | 1 to 3 hours a pay run, more at year end | A few minutes to approve hours |
| Risk of errors | You carry it, and HMRC penalties for late RTI are real | Shared with a provider who does it daily |
| Best for | Sole director with no staff, or one very simple employee | Anyone with staff, CIS, benefits or variable hours |
As a rule of thumb, outsource when you have a second employee, when hours vary week to week, when you are in construction, hospitality or retail with changing staff, or whenever the monthly submission keeps slipping down your to-do list. If your bookkeeper already reconciles the wages in your accounts, having them run the payroll as well means one person owns the numbers from payslip to bank statement. We cover that in can a bookkeeper do payroll.
How do I choose a payroll provider in Medway or Kent?
- Ask what is included. Payslips, RTI, P45s and P60s should be standard. Pensions, CIS and P11Ds may not be.
- Ask about your trade. A restaurant with tips, a builder with subcontractors and a shop with student staff each need something different.
- Check who files with HMRC. The provider should submit as your authorised agent, and you should keep access to your own PAYE account.
- Ask what happens if a submission is late. A good answer names who is responsible and how fast they fix it.
- Look for joined-up bookkeeping. Payroll that feeds straight into Xero saves double entry and mistakes. See our Xero bookkeeping services page for how that works.
- Agree a fixed fee. Per-employee pricing with a clear minimum is easier to budget than hourly billing.
More on picking a local provider is in our guide to choosing bookkeeping firms in Kent.
Frequently asked questions
How much do payroll services cost for a small business in Kent?
Most small Kent businesses pay between £25 and £60 a month for one to five employees, which works out at roughly £4 to £10 per employee per month for basic processing. Weekly pay runs, pensions, CIS and year-end extras can add to that.
Can my bookkeeper run my payroll?
Yes. Many bookkeepers run payroll as part of their service, submit to HMRC as your agent and post the journals into your accounts. It is often the most convenient option because the wages are already in your books.
Do I need payroll if I am the only director of my limited company?
If you pay yourself a salary, yes. Even a small director’s salary needs to be reported to HMRC through RTI so that it counts towards your National Insurance record and is correctly deducted in your company accounts.
What is RTI and when do I have to submit it?
Real Time Information means telling HMRC about each payment to your staff on or before the day you pay them. Late submissions can lead to penalties, which is one of the main reasons businesses outsource.
What is the Employment Allowance?
It is a £10,500 reduction in your employer National Insurance bill each year. Most small businesses with more than one employee qualify, but a company whose only employee is the director usually does not.
Do you provide payroll services in Gillingham, Rochester and across Medway?
Acey Bookkeeping works with employers across Medway and Kent, mostly online through Xero, by phone and by video call, and can meet in person where it helps.
Getting your payroll sorted
With the National Living Wage rising again in April 2027 and benefits payrolling on the way, the cleanest time to hand payroll over is before the tax year ends. We are a mother and daughter team based near Rochester, with more than 40 years of combined experience, certified Xero advisors and members of the Institute of Certified Bookkeepers. Have a look at our bookkeeping and payroll services for small businesses across Medway and Kent, or book a free, no-obligation chat with Acey Bookkeeping. We will look at how many people you pay and tell you honestly what it would cost.
