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 that payroll figures need to be reviewed before HMRC payroll submissions.
That last point catches people out: a payslip is just paper. HMRC payroll submissions still need to be handled by you, your accountant, or specialist payroll software.
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 need help preparing payroll submission figures — late or incorrect payroll submissions can create penalties.
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. LedgerlyPro takes a different approach — payroll tools are included in the Premium Plan with no fixed employee cap, branded PDF payslips, PAYE and NI estimates, and monthly accountant-ready summaries.
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.
