What is the Best Payroll Software for Ecommerce Sellers?

payroll for ecommerce sellers

Table of Contents

If you run a small ecommerce business, the chances are you prefer to run your own payroll. But getting it right means opting for the right software solution so you don’t fall foul of HMRC or miss a payment.

Whether you’ve budgeted for fully-featured software or a more affordable payroll solution, here’s what to look for in the main contenders.

What to Look for in Payroll Software

First and foremost, your payroll software needs to be Real-Time Information (RTI) compliant. HMRC regularly evaluates payroll solutions to ensure that they report to HMRC whenever an employee is paid. If you submit payroll late to HMRC, you will incur a fine for each late submission.

Different businesses have different requirements, but look for the following basic features:

  • Recording employee details
  • Calculating statutory pay
  • Calculating pay and deductions
  • Calculating how much you need to pay HMRC
  • RTI compliance
  • GDPR compliance

The following payroll solutions also tackle standard tasks like printing payslips and P60s.

What’s the Best Payroll Software for Ecommerce Accounting?

When it comes to providing payroll software for ecommerce sellers, we recommend two main providers – Quickbooks and Xero – but we also assess FreeAgent and BrightPay.


Inuit’s accounting software Quickbooks markets itself as the most popular cloud accountancy program and is aimed primarily at SMEs who need help managing payslips, statutory pay and pensions and submitting data to HMRC. There’s one interface and payroll data integration which makes it easy to see a complete overview of your business at any time.

In terms of features, there’s not much Quickbooks can’t do. You can run extensive pay schedules and even make international payments via integration with money transfer services.

In terms of usability, Quickbooks is definitely aimed at the pro user and its UI can be a little less intuitive than some of its rivals. The app may not be quite as usable as others, but the huge range of add-ons available means this software rates highly for connectivity.

In terms of cost, you’ll pay a monthly fee (get in touch for exclusive discounts), plus an additional fee for payroll functionality outlined below.

Quickbooks Payroll Pricing

As of November 2021, Quickbooks advertised the below pricing on their website for payroll services.  Please note the prices are in addition to a cloud accounting package

  • Standard Payroll
    £4/month + VAT

    Perfect for director-only businesses and employers of small teams who need speed and simplicity

  • Advanced Payroll
    £8/month + VAT

    Perfect for employers who need additional features including HR and reporting


Another incredibly well known and popular provider, Xero is another solid choice for an all-around payroll solution, even if you use different accounting software.

Xero is one of the biggest cloud accountancy software providers, with over 3 million subscribers worldwide. You can choose from Starter, Standard and Premium payroll plans and the Xero Me app gives employees a range of self-service options which make life easier all around. It’s also one of the reasons Xero rates so highly for connectivity.

Xero payroll’s range of tools is extensive and only matched by high-end software. Enter a pay run, email or print payslips, make bulk payments, set up flexible payment calendars and built-in timesheets – this is a full employment solution for SMEs. Functionality is backed up with a clean and streamlined UI with seamless RTI reporting, but the extra features can make it a little complicated to use.

Where Xero really shines is the self-service capability via the Xero Me app. Employees can download payroll and payslips, or add extra functionality with add-ons including UpSheets and HRPartner. You can even connect to Quickbooks, and like Quickbooks you pay for your payroll functions plus a charge per employee. That’s affordable for smaller ecommerce sellers, but can mount up as you grow. However, like Quickbooks, Xero is a strong overall choice with excellent connectivity.

There’s not much to choose between Quickbooks and Xero when it comes to an accounting package, with either representing a solid choice for a small to medium ecommerce business.

Xero Payroll Pricing

As of November 2021, Xero advertised the below pricing on their website for payroll services. Please note the prices are in addition to a cloud accounting package:

  • Up to 5 employees (£1 for each additional employee)
    £4/month + VAT

    Automated online payroll with pension enrolment


If you’re looking for a payroll solution aimed squarely at freelancers and SMEs, FreeAgent is a solid choice. With a unique subscription model based on your business type, payroll software is included as standard in the Limited Company, Partnership/LLP and Sole Trader packages. 

FreeAgent has a well-deserved reputation for fuss-free software that makes running monthly payroll and filing NI and PAYE contributions a breeze. Recognised by HMRC, FreeAgent includes an excellent tax timeline for at-a-glance ease of use, and will generate monthly payslips and annual P60s.

You won’t find the kind of features here that you’ll get with a full professional solution like BrightPay. But you will enjoy an affordable solution with an exceptionally intuitive interface. In terms of connectivity, FreeAgent is less developed but still offers integration with well-known apps like Zapier.

FreeAgent’s lack of features does mean it’s incredibly competitive on price, offering the most affordable accounting and payroll solution of these choices. 

FreeAgent Accountancy Software & Payroll Pricing

As of November 2021, FreeAgent advertised the below pricing on their website for payroll services.

Please note that unlike other providers FreeAgent do not charge extra for payroll software so the costs below are for their full accounting package.

All accounting software with FreeAgent is free if you have a business current account with NatWest, Royal Bank of Scotland, Ulster Bank NI – or have a business account with Mettle.

  • Sole Trader
    £19/month + VAT Full accountancy software + payroll services
  • Partnerships & LLP
    £24/month + VAT

    Full accountancy software + payroll services

  • Limited Company
    £29/month + VAT

    Full accountancy software + payroll services


If FreeAgent is great for startups and small-scale sellers, BrightPay is a fully-featured professional solution for larger or multiple companies.

BrightPay market themselves as specialist payroll providers, and with over 30 years experience they certainly have packages that cover every payroll requirement. BrightPay have a tiered system of pricing depending on number of employees although there is an option for unlimited employees.

If you’re looking to manage a large team with complex requirements, BrightPay could be for you. The myriad functions and features make this package ideal for users running payroll on a daily basis, but it’s less of a fit for ecommerce sellers who only need to run payroll once a month. But the advanced functionality is superb if you need to run several payrolls or handle deductions like payments and pensions via direct links to pension providers.

For power users, there’s full API integration with a range of accounting packages including Quickbooks Online, Xero, Sage, FreeAgent and AccountsIQ among others. This integration allows users to send payroll directly to their account software.

BrightPay Payroll Pricing

As of November 2021, BrightPay advertised the below pricing on their website for payroll services:

  • Up to 3 employees
    £49/year + VAT Full payroll services
  • Up to 10 employees
    £99/year + VAT Full payroll services
  • Up to 25 employees
    £149/year + VAT Full payroll services
  • Unlimited employees
    £199/year + VAT Full payroll services

Free Payroll Software

The HMRC website lists a number of suppliers that provide free payroll software for UK businesses with fewer than 10 employees.

Whilst HMRC has vetted these, please note that it may not be as easy as signing up and automating the process and there are several pitfalls if the provider is missing any of the features specified at the top of the article.

As with any payroll software it’s easy for ecommerce sellers operating a DIY approach will submit incorrect data regarding timescales and procedures which can result in hefty fines, which is why ecommerce accountants offer payroll management services.

Choosing the Best Payroll Software for your Ecommerce Business

When it comes to the best choice of payroll software, you need to bear in mind your situation and your future plans.

For most small to medium ecommerce users, Quickbooks or Xero will fit the bill. Each solution offers similar features and pricing, and will make short work of payroll alongside a myriad of additional accounting features. Xero offers excellent self-service features via its app, while Quickbooks has a wide range of add-ons for extra functionality. 

If you’re a startup with limited costs, FreeAgent offers you all the functionality you need with an intuitive UI whereas if you have complex payroll needs, BrightPay offers a raft of features such as pension integration although comes in at a higher cost.

If you are spending too much time worrying about payroll it could be a sign you need to outsource to an ecommerce accountant to submit payroll on your behalf.

Payroll Giving you a Headache? Use an Accountant as your Agent

Your Ecommerce Accountant are specialists in working with the needs of online businesses. Our fixed-price monthly fees are ideal for growing ecommerce businesses and we offer payroll support for just £20 (ex. VAT) per payroll plus £5 (ex. VAT) for each employee over two.

We as Agents have HMRC authorisation to deal with all our clients’ payroll data under our own Agent’s banner. This is done to ensure that the correct data is submitted as per legislation regarding timescales and procedures.

Our ecommerce clients have peace of mind knowing that we have advised them well of all the intricate legislative and multifarious tax and National Insurance complexities, together with submitting their correct data in a timely way to avoid them getting penalties and interest charges.

This simple pricing structure means there are no nasty surprises when it comes to accountancy fees and you’ll have peace of mind that best practice is being followed.

Recommended articles:

Free 30 Minute Consultation

Why not grab a Free 30 Minute Consultation with one of our Accountants, they can answer any questions you have about your e-commerce or marketplace business, guide you on tax efficiency and see if we can help you.

You Have Nothing to Lose & A Lot to Gain

Free 30 Minute Consultation

Why not grab a Free 30 Minute Consultation with an Accountant, they can answer any questions you have about your e-commerce or marketplace business, guide you on tax efficiency and see if we can help you.

You Have Nothing to Lose & A Lot to Gain
Share the Post:

Recent Posts

Book your Free Consultation or Quote for services

Want to speak to an e-commerce accountant for free, get 30 minutes of expert advice on accounting for your e-commerce business.
Not have any questions? If you just want a quote then book a meeting, we can discuss what you need and give you a quote.

Get more information on becoming an affiliate.

Please get in touch

Wait! Before you go...

We don’t want you to miss out on your FREE consultation with one of our team.
Ask any accounting questions you might have. We’re usually about to give you some quick fixes or answer those questions that have been bugging you.
We’ve even advised some Amazon sellers on how to save Thousands of pounds on their Amazon fees.