Hire your first employee and you inherit a legal duty most new employers don't see coming: every worker must receive an itemised payslip on or before payday, showing gross pay, deductions and net pay. The question is whether a free template does the job — or whether you need real payroll software.
When a template is enough
A free payslip template works fine if:
- you employ one or two people on fixed salaries,
- nothing changes month to month — no overtime, commission or sick pay,
- you're comfortable calculating PAYE and National Insurance by hand (or from HMRC's Basic PAYE Tools), and
- you remember to file your Full Payment Submission (FPS) to HMRC on or before each payday.
That last point catches people out: a payslip is just paper. The legal heavy lifting is the RTI filing to HMRC, and a template won't do that for you.
When you've outgrown templates
Switch to software the moment any of these is true:
- Three or more employees — manual NI calculations across multiple tax codes is where errors breed.
- Variable pay — hourly staff, overtime, commission or tips mean every month's maths is different.
- Auto-enrolment pensions — you must assess workers, calculate contributions and file with your provider every pay run.
- Statutory payments — sick pay, maternity or paternity pay have rules that change yearly.
- You've ever filed an FPS late — penalties start at £100 per month per scheme.
What payroll software actually costs
Most UK providers charge per employee per month, so costs creep as you grow: ten staff can easily mean £50+/month before add-ons. Ledgerly Pro takes a different approach — payroll is included in the Premium Plan at a flat £18.99/month for up to 50 employees, with branded PDF payslips, PAYE and NI calculated automatically, and payslips emailed on your pay-run schedule.
The honest recommendation
Start with a template if you're paying one salaried person and enjoy spreadsheets. For everyone else, the maths is simple: an hour of your time per pay run costs more than the software does. Compare plans or start a free trial — try all features free for 30 days, no card required.