Payroll Screams: How Small Businesses Are Trying to Pencil It in
Employment Hero’s latest study has lit the alarm over payroll compliance for small firms. A whopping 84% admit to payroll blunders, and over a third’ve found themselves on the wrong side of the taxman for errors costing thousands of pounds.
What the Numbers Really Mean
- About 1,000 small‑biz leaders surveyed revealed that 40% have faced fines for payroll mishaps.
- Even though many spend on average £2,724 a month outsourcing payroll (from £1,625 for the tiniest SMEs up to £3,408 for the bigger ones), errors are still the norm.
- More than half report making a mistake on payroll more than once.
- Manual processing is still the survivor drug: 31% of all organisations rely on spreadsheets or forms. For the smallest firms (5–19 staff), that climbs to 44%.
- The most common slip‑ups: wrong wage calculations, late or skipped payments.
Why Compliance Is a Growing Threat
With tighter enforcement of employment law, 67% of SMEs are worried about employee complaints tied to payroll, while 54% label payroll mistakes as a “significant and recurring challenge.” And a solid 70% of small businesses are anxious about keeping pace with payroll tech—especially those with 100–149 employees.
Real‑World Tales: Rohan Simon’s Payroll Nightmare
Rohan Simon, CEO of Medical Defense Society, runs a lean crew with no HR function. Before hiring Employment Hero, he spent five to six hours each month wrestling with payroll, stealing time from the big picture work.
“We’d occasionally miss payroll deadlines—an ordeal I hated because people deserve to get paid on time. I needed a solution that could sync with my accounting, pension provider, and HMRC automatically. Now, all I do is download the banking file. It’s a game changer!”
Employment Hero’s Human‑Friendly Plan
To tackle this headache, Employment Hero is offering free payroll software to all UK businesses. They’re pairing this with a fresh competition: win £5,000 and a one‑on‑one consultation with Sarah Sharpe, Head of Payroll Ninjas. UK SMEs that sign up and run a pay run by 31 October 2025 automatically enter the draw.
Managing Director on the Need for Change
Kevin Fitzgerald, Managing Director of Employment Hero UK, said: “With rising minimum wages, increased NICs, and stricter enforcement, there’s never been a more perilous time to be a small employer. Payroll has become a minefield, and outdated systems are costing SMEs dearly. Nothing should cost a business a fine simply for not having the right tools—so we’re making payroll free to level the playing field.”
