Accounting technology / Glossary / Payroll bureau

What is a payroll bureau?

Definition

A payroll bureau is a firm that runs payroll for other businesses. It calculates each pay run from the client's hours, salaries and changes, produces payslips, files payroll returns and arranges the payments. The term is used mainly in the UK and Ireland; in the US the equivalent is a payroll service provider.

Also calledpayroll service provideroutsourced payrollmanaged payroll

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Term used in: UK and Ireland
US equivalent: Payroll service provider
Category: Payroll

How a payroll bureau works

Each period the client sends starters, leavers, hours, overtime, bonuses and absences, usually through a portal or the payroll software itself. The bureau runs the payroll, sends the draft for approval, then issues payslips, submits the returns and produces the bank file and a payroll journal for the ledger. In the UK that includes the Full Payment Submission under Real Time Information, pension auto-enrolment and year-end P60s. Many accounting firms run a payroll bureau as a service line alongside bookkeeping and tax. The client remains the employer and is responsible for what is paid and filed, even when the bureau does the work. In the US, payroll service providers and professional employer organisations do the same job; a PEO also becomes co-employer for HR and benefits. Payroll software such as PayFit, Gusto and Rippling is used both by businesses running their own payroll and by bureaux running payroll for clients.

Common questions

What does a payroll bureau charge?+

Usually a fee per employee per pay run, sometimes with a minimum monthly charge and extra fees for year-end, starters and leavers, or pension administration. Prices depend on headcount, frequency and complexity.

Who is responsible if a payroll bureau makes a mistake?+

The employer remains legally responsible to employees and tax authorities for correct pay and filings. The bureau's contract sets out what it will put right and any liability it accepts.

What is the difference between a payroll bureau and a PEO?+

A payroll bureau processes payroll for the client, which stays the sole employer. A PEO, common in the US, becomes co-employer, handling payroll, benefits and some HR compliance under a shared employment arrangement.