For UK-based employers managing payroll, using Pay As You Earn (PAYE) software that’s recognised by HMRC is more than a convenience – it’s a regulatory requirement. To that tune, using a tool that comes directly from the government, then, makes a lot of sense.
Businesses with fewer than 10 employees can use HMRC’s Basic PAYE Tools to simplify things like tax calculations and real-time information (RTI) submissions.
It’s a free application provided directly by HMRC that’s fully compliant and functional, but it’s a seriously stripped-back system with an ultra-basic interface and a highly limited feature set that does nothing more than it needs to.
Covering all the essentials like calculating income tax, National Insurance, producing payslips and sending requiring reports to HMRC, it does unfortunately lack the modern capabilities of other solutions in this space, including free platforms for micro-businesses.
In contrast, several free commercial offerings like 1st Money exist, but in a world where free products are dwindling in number (IRIS’s Payroll Basics is phasing out after 2025/26), the fact that the people who set the standards also offer a free solution to meet those standards is a very welcome move.
- Our guide to the best payroll software
HMRC Basic PAYE Tools: Plans and pricing
HMRC’s Basic PAYE Tools is a completely free package intended for small businesses with fewer than 10 employees. Even though there’s no cost involved at all, Windows, Mac and Linux versions of the software have all been developed to ensure widespread adoption.
It sets the foundation for what ticks the right boxes, but other free options from IRIS, Primo and 1st Money do offer more functionality.
HMRC Basic PAYE Tools: Features
HMRC’s Basic PAYE Tools records employee details to calculate PAYE, National Insurance and student loan deductions, while also generating real-time submissions to HMRC, Employer Payment Records and statutory payment calculations.
On the company’s side, admins can produce printable payslips using HMRC’s system, too.
However, HMRC themselves say that the tool only allows you to perform “most” payroll tasks – an admission that even moderate features let alone advanced ones may be missing.
Beyond that, there’s really not a lot to talk about. No flashy artificial intelligence, no automations, not even an employee self-serve portal. Just a totally stripped-back bit of kit for companies to do what they need to do to stay above the board in HMRC’s books.
HMRC Basic PAYE Tools: Ease of use
Apart from the Windows, Mac and Linux software packages, you can also access HMRC’s Basic PAYE Tools on Microsoft Edge, Google Chrome, Firefox and Safari, so you don’t necessarily have to download any software at all.
We downloaded the software, which took a long time to open on macOS 15. Once it did, it mirrored an online portal, so it’s probably just as effective to access the government’s Basic PAYE Tools from a browser.
On the whole, the system isn’t especially intuitive and can feel awkward to use.
HMRC Basic PAYE Tools: Support
Being a back-to-basics government-issued tool, there’s no real support for Basic PAYE Tools.
What you can do, though, it get in contact with HMRC more generally. This includes chatting about payroll-related queries, but support for the software and online service might not be so strong.
We couldn’t find any help articles for the system, but getting in contact with HMRC is a relatively simple affair and speaking to a human agent is easy by phone.
HMRC Basic PAYE Tools: Final verdict
Basic PAYE Tools from HMRC offers a compliant and cost-free entry point for micro-businesses with fewer than 10 employees, handling core payroll tasks like tax and NI calculations, RTI submissions and statutory payments.
However, its no-frills approach presents major limitations, such as the absence of auto-enrolment, cloud access or a modern user interface.
Instead, HMRC’s Basic PAYE Tools is an online portal or a stripped-back desktop app based on that same portal, so it’s only suitable for the most basic use cases.
For businesses that need more than the basics but still want to avoid high costs, free commercial software such as 1st Money offer a more appealing middle ground. You still get the benefits of free software for micro-businesses, but you get a much more inviting interface with a few more handy features.
HMRC’s lack of direct support for Basic PAYE Tools is also a downfall, but the fact that it comes direct from HMRC does mean that it covers all the bases exactly as HMRC intends.
For tiny startups who need to do no more than the sheer essentials, HMRC’s Basic PAYE Tools are fine, but we think it’s worth exploring other free options for a more comprehensive approach.
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