HMRC Basic PAYE Tools

HMRC Basic PAYE Tools is a free payroll utility for small employers who need to calculate pay-related deductions and report payroll to HMRC. It suits businesses with no more than nine employees that can manage pensions, records and backups separately. Its focused scope makes it a practical way to cover core payroll duties at no software cost, but it is not a complete payroll system.

Overview

The tool calculates employee tax and National Insurance and supports Full Payment Submissions and Employer Payment Summaries. It also supports tax filing, tax payment support, tax form preparation, tax reconciliation and year-end forms. For an employer with a small workforce and straightforward reporting needs, that is a useful set of essentials without a subscription.

Use requires HMRC registration and a PAYE Online login. Employers must secure and back up their own payroll data; HMRC keeps no copy and cannot recover lost or destroyed records. That makes the software a weaker fit for businesses without a reliable record-keeping process.

Key features

Employers can record up to nine employees and calculate statutory sick, maternity, paternity, adoption, shared parental, parental bereavement and neonatal care pay. The range of statutory payment calculators is useful for a small employer dealing with different leave situations, though the employee ceiling leaves little room to grow.

Payslips can be saved as PDFs, printed or emailed if the employee agrees. The tool can also supplement commercial payroll software: employers can use it to check an employee’s National Insurance number or submit an Employer Payment Summary if their other software cannot do so.

It does not support pension auto-enrolment, calculate contributions, check eligibility or send information to a pension provider. Employers must handle those tasks elsewhere, so businesses seeking an all-in-one payroll and pension workflow should look elsewhere. The latest version checks for updates automatically, usually around tax-year changes or when rules change, provided updates are enabled in settings. When a failed submission prevents a correction, the user guide directs employers to HMRC’s technical support helpline.

Pricing

The Basic PAYE Tools plan costs nothing and is intended for businesses with fewer than 10 employees. There is no free trial because the plan is free. It includes the payroll utility’s tax calculations, reporting and payslip functions, but the free price does not remove the nine-employee limit or add pension support. It is a strong fit for eligible small employers who can cover pensions and data management independently; firms that need those functions will need another solution or additional software.

Platforms

HMRC Basic PAYE Tools is available for Linux, macOS and Windows. That range accommodates employers using the major desktop operating systems, though the product is a desktop tool rather than a browser-based service.

Who it's for

This is best for employers with fewer than 10 employees who are registered with HMRC, have a PAYE Online login and need core payroll calculations and HMRC submissions. It is not suitable for agents or bookkeepers: payroll data cannot be copied for a single payroll within the tool. Growing employers and those wanting pension calculations or provider submissions should choose software that covers those needs.

Pros and cons

• Pros: Free core payroll and HMRC reporting for small employers, with no software charge.
• Pros: Statutory payment calculators cover a broad range of leave and care situations, alongside payslip creation and export options.
• Pros: It can fill specific gaps in commercial payroll software, including checking National Insurance numbers and sending an Employer Payment Summary.
• Cons: Employee records stop at nine, making it a poor choice for employers near or beyond that limit.
• Cons: Pension auto-enrolment and related calculations and submissions are outside its scope.
• Cons: Employers alone are responsible for payroll data security and backups, and the tool does not suit agents or bookkeepers.

Alternatives

For a broader comparison, see Payroll Tax Software.

Choose PaymentEvolution if you want to consider a service with Android, iOS, API and web platforms and a Growth plan priced at $0, with a $4.00 per employee per pay run charge and a $55 one-time setup fee. Its free plan covers up to three employees and email support only.

TaxZerone is another option if you need online W-9 requests or federal information-return filing, with its Form W-9 plan at no cost and information returns priced at $2.49, paid once for 1 to 25 forms.

Consider Yearli if you need W-2 and 1099 forms, quarterly filing, chat and email support, or per-form TIN matching; its Core plan is free to start, with an annual subscription plus filing fees.

efile4Biz may suit a single user who wants totals and summary reports, chat and email support, and pay-per-form filing; its Basic plan is free and includes TIN matching at $1 per match.

For a free Windows option, e@syFile Employer lists requirements of Windows 10 (64 bit), 8 GB RAM and 2 GB of hard drive space.

TaxBandits offers a Basic plan at $19 a month with unlimited pay runs and no employee fee; consider it if those stated plan terms better fit your payroll needs.

eFile Express charges $3, paid once for a Form 94x PIN request and $8, paid once for an employer IRS return submission, which may suit a reader seeking per-request or per-return filing.

ExpressEfile charges $1.49, paid once for federal Form W-2 e-filing and $0.49, paid once for a Form 8974 add-on when e-filing Form 941; consider it for those specific filing needs.

Verdict

Choose HMRC Basic PAYE Tools if you employ fewer than 10 people, need core payroll calculations and HMRC reporting, and can manage pensions and payroll backups yourself. Its strongest reason to choose is that those essentials cost nothing across Linux, macOS and Windows. Look elsewhere if you need pension processing, room to grow beyond nine employees or tools suited to an agent’s workflow.