PAYE tools straight from HMRC, but other free options offer a lot more.
For UK-based employers managing payroll, using Pay As You Earn (PAYE) software that’s recognised by HMRC is more than a convenience – it’s a regulatory requirement. To that tune, using a tool that comes directly from the government, then, makes a lot of sense.
Businesses with fewer than 10 employees can use HMRC’s Basic PAYE Tools to simplify things like tax calculations and real-time information (RTI) submissions.
It’s a free application provided directly by HMRC that’s fully compliant and functional, but it’s a seriously stripped-back system with an ultra-basic interface and a highly limited feature set that does nothing more than it needs to.
Covering all the essentials like calculating income tax, National Insurance, producing payslips and sending requiring reports to HMRC, it does unfortunately lack the modern capabilities of other solutions in this space, including free platforms for micro-businesses.
In contrast, several free commercial offerings like 1st Money exist, but in a world where free products are dwindling in number (IRIS’s Payroll Basics is phasing out after 2025/26), the fact that the people who set the standards also offer a free solution to meet those standards is a very welcome move.
Our guide to the best payroll softwareHMRC Basic PAYE Tools: Plans and pricing
HMRC’s Basic PAYE Tools is a completely free package intended for small businesses with fewer than 10 employees. Even though there’s no cost involved at all, Windows, Mac and Linux versions of the software have all been developed to ensure widespread adoption.
