How to switch payroll provider

When should the new provider take over?

Start with the first payday you want the new provider to process. Work backwards from the input deadline, approval date and time needed to arrange payments. Our typical SME switch takes two to four weeks, but incomplete records, unresolved discrepancies or complex arrangements can require longer.

You can switch during the tax year; you do not have to wait for year end. A mid-year move needs accurate cumulative records, while a year-end move needs clear ownership of final submissions and employee documents. Choose a point that gives your organisation enough time to check the transfer properly.

Name an employer contact and deputy. Record which provider handles the last outgoing payroll, first incoming payroll, outstanding corrections and earlier-period queries. Avoid an ambiguous handover where each provider believes the other is responsible.

What should be agreed before records move?

Document frequencies, employee groups, pension arrangements and reporting needs. Explain statutory pay cases, salary sacrifice arrangements, attachments and other deductions. Identify benefits reporting requiring separate consideration rather than assume it forms part of ordinary processing.

Our standard service includes payroll processing, secure portal access and statutory pension submissions. Confirm how your team supplies changes, receives draft reports and approves payroll. Record the escalation route for urgent questions and information needed to resolve them.

Check the outgoing provider's notice and export arrangements. Obtain records before access ends and confirm how historical payslips and reports remain available. A new portal does not automatically contain documents from the old system.

What goes in the transfer pack?

Use an agreed secure channel with access limited to authorised people. Avoid sending an unprotected spreadsheet of personal and bank details through ordinary email. Check exports cover the correct PAYE scheme, tax year and final processed period.

Include current employees and relevant records for earlier-year leavers. Cumulative reporting depends on more than the people appearing in your next run. Ask the incoming specialist to confirm the pack is complete before the migration date is treated as settled.

• PAYE and Accounts Office references, pay calendars and pension details.
• Employee identities, payroll IDs, tax codes, NI categories and start dates.
• Pay rates, regular additions, deductions and verified bank details.
• Year-to-date pay, tax, NI, statutory payments and pension figures.
• Leaver records, submission receipts and unresolved corrections.

How do authority and employee identities carry over?

Our onboarding includes HMRC authorisation through Form 64-8. HMRC also provides other authorisation routes for particular services; check current guidance with the provider so required permissions are clear. Retain your own business access and never share personal sign-in credentials as a shortcut.

Preserve payroll IDs where software supports it. Where IDs change, follow HMRC's reporting requirements, including the change indicator and previous ID information. Incorrect handling can create duplicate employment records and distort the PAYE position.

A provider change alone does not mean employees have left your business. Do not issue P45s or invent new employment start dates simply to move continuing employees between systems. Keep the employment record distinct from the software migration.

What should reconciliation and the parallel run prove?

Reconcile imported year-to-date figures against outgoing final reports. Check employee totals and scheme totals: an overall match can conceal errors allocated between employees. Investigate taxable pay, tax, NI, statutory payment and pension differences before accepting the transfer.

Complete a parallel run using the same period and approved inputs in both systems. Compare gross-to-net results, deductions, employer costs and pension outputs. Some differences have legitimate explanations, but each material variance needs a documented reason and approval.

A parallel run is a checking exercise, not permission for both providers to submit live payroll or release payments. Identify the single live-submission owner and keep evidence of the comparison. Go-live should follow an explained result, not merely a calendar deadline.

What are the four handover steps?

A handover needs named owners and evidence at each stage. The order matters: access and data readiness come before approving live payroll. Keep the first payday visible in the plan, but do not skip unresolved checks to achieve an arbitrary start date.

1. Setup and discovery: confirm scope, records, timetable and employer contacts.
2. HMRC authorisation: complete Form 64-8 as part of our process and confirm required access.
3. Reconciliation and parallel run: check year-to-date balances and explain payroll differences.
4. Go-live: create employee logins, approve the live run and release employer payments.

What should you check after go-live?

Check employee logins before live payslips become available. Tell staff where future documents appear and how access problems should be reported. Confirm how the employer retrieves records if a worker leaves or an invitation fails.

Review the first live payroll and approve the payment file through normal controls. You pay employees using that file and remain responsible for HMRC and pension liabilities. Outsourcing processing does not transfer those legal duties.

Retain submission acceptance evidence and compare resulting liabilities with your records. Keep the outgoing provider available for agreed historical queries until checks are complete. Review the first few runs together, especially where pay elements or pension settings differed between systems.